Personal finance management has significantly transformed, leading to more positive financial habits. It begins with 24/7 access to your bank accounts and options to pay with anything, from a card to a smartphone to a smartwatch. While it simplifies payments, it does affect spending. This article examines the tech’s good and bad influence on our finances.
The role of Open Banking
Many of the tech improvements for personal finance are related to Open Banking. The magic button allows third parties (such as an app) to access your bank details. This technology powers several tools, such as financial planners, investment, and budgeting apps. As this involves sharing access with multiple services, using the best password manager is crucial. It helps store complex, unique passwords for each financial tool or banking app, reducing the risk of unauthorized access or data leaks.
AI assistance when spending
Many personal-finance-related applications include AI-powered features, such as an AI budget planner (based particularly on your habits). Thus, AI becomes a financial consultant anyone can use to improve their behavior. However, given the number of issues surrounding AI responses, taking financial advice from them should be done cautiously.
Yet, AI can be practical for planning a budget for weddings, vacations, or grocery trips. For example, say you want to save money and cook appetizing meals without spending too much. Simply feed this to AI and let it come up with budget-friendly recipes. As a result, you’ll get inspiration for the next dinner and have it done by investing less.
Anyone can budget
Thanks to tech, spending can be easier to control, with plenty of options for setting automatic limits or reminders. A budgeting app (or features already available within your bank app) is the bridge for being self-aware of your financial behavior:
- Apps let you easily designate monthly or weekly budgets and encourage you to review them.
- Most budget apps show analytical data on your spending, letting users recognize their biggest spending categories.
- Furthermore, these tools sync information from your bank accounts with the app, preventing you from having to type it in manually.
- You can also create goal-based savings plans and automate small portions transferred monthly to a savings account.
- Some bank providers support small investing opportunities, where each time you pay by card, the sum is rounded up and assigned to different investing options.
Investing More Accessible
You no longer need in-depth knowledge or conversations with brokers to start investing. Although thousands of people experience decision paralysis due to other things, the barrier to becoming an investor has become much lower.
For example, you can use user-friendly investing applications that simplify and even gamify investing. While you can even invest in new ideas and potential entrepreneurs, there is a grim side to increased accessibility. After all, investing is always a risk, and having it done easier without much supervision could lead to bigger losses. Thus, while more accessible, the obligation to boost your financial literacy remains.
Plenty of financial education opportunities
Speaking of improving financial literacy, another brilliant effect of tech is the endless learning opportunities. You have special workshops, global online courses, articles, expert opinions, and more. Thus, people can rearrange and improve their spending, investing, or other financial activities whenever they want.
Extending your income sources
The digital space lets you make money with money by investing. Additionally, it has also introduced many options for earning more. For example, the creator economy has been undeniably rising, with random people earning thousands and even non-profit organizations raising their funds from supportive communities. Besides, people can sell digital products or even dabble in teaching or the sharing economy.
You can even make free money with cashback apps, micro-tasks, or internet sharing, referring to funds that don’t require much effort. These refer to easy cash options when the applications do all the work for you. Of course, in terms of micro-tasks, you’ll need some time to perform the assignments. However, given the standard simplicity of these tasks, it is accessible to nearly anyone.
Conclusion
Personal finance frequently receives little attention in our lives. However, it’s crucial to save up or enjoy more financial freedom. Given the variety of assistance you can receive for lowering expenses or doubling investments, there’s no reason to be stuck in the past. Take charge with tools that automate most of the processes that seem tedious to us, such as recognizing the financial patterns that are the most detrimental. Instead, even free budgeting apps can relieve this burden.
