How Financial Technology Can Impact Your Overall Money Management

How Financial Technology Can Impact Your Overall Money Management
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Something as small as sending your friend $5 on Venmo for a takeout coffee might not feel revolutionary, but in a way, it really is. Financial technology has become so prevalent in today’s world there is even an acronym for it now, fintech. Once something has become its own catchphrase, you know it is significant. Combining the latest technological developments with financial services or applications has helped disrupt the industry positively and provide better financial services to businesses and individuals in the process. Since the need for money management is not going anywhere anytime soon, aligning your goals with the latest methods for reaching them creates a perfect synergy for success in the financial arena. Fintech is making financial resources more accessible and user-friendly, so people can learn more about their personal finances without feeling intimidated by their beginner status.

Personalized Experiences

You would think that taking the human interaction out of an experience would decrease the personalization, but that is not entirely accurate. The access that fintech provides allows you to cast a wider net when researching things like loan options, for example, that you would not have simply going physically into your bank or lender of choice. Using the internet, or even certain apps on your phone, to find the right personal loan gives you a lot of control and options for customizing your overall experience. Once you have narrowed down your needs regarding a loan, you can get matched with options in less than 60 seconds. Time savings is another perk of the advancements in financial technology. Individuals and businesses are often stretched so thin for extra time in their day to day schedules, so being able to check items off the to-do list quickly but that you can also trust and feel secure about is invaluable.

Added Accountability

Whether you are budgeting for just yourself, or an entire household, budgeting, in general, can feel stressful, but it really is a necessary element for successful personal money management. Luckily, advancements in technology have created, accessed, and maintained a budget relatively painless and virtually effortless. Managing your money coming in and your money going out is the simple essence of a budget, and the first step is tracking your spending. If you do not know where your money has been going, you will not be able to responsibly move it around to accommodate the demands of your personal money goals.

There are so many free apps available on your cell phone that allow you to create your own categories for spending so you can input every dollar spent to identify trends and tweak habits. Knowing that you have the responsibility of entering your spending into an app creates accountability, even if you are the only one who ever sees the information. The understanding that you are obligated to report these numbers can help you take a pause and evaluate if the spending is even worth it. Not to mention at the end of every month, seeing the details of how much you are spending in each category of your life can illustrate the areas that have to be adjusted to take control of your financial future.

How Financial Technology Can Impact Your Overall Money Management 1

Accessibility and Convenience

Think about the last time you physically wrote out a paper check. It is probably a very distant memory. You have fintech to thank for that. Paying reoccurring bills on autopay is a feature that is practically automatic nowadays. This added convenience has the hidden benefit of helping your credit score as well. Setting up reoccurring bills on autopay ensures that you pay them on time and at least the minimum amount due. You already have the good practice of keeping the money available in your bank account when these bills are withdrawn. This enriches your payment history, which will be reflected in your credit score, which we all need to be conscious of regardless of where we are in our money management journey.

Introduction to Investing

Stocks and investments are two areas that traditionally were associated exclusively with the financial savvy and advanced individuals in the world. Still, recent developments have made them more common and widespread across all skill levels. While it is smart and necessary for success to have a baseline knowledge of how the stock market works before you dump money into it blindly, investment apps and even some personal banking apps have slimmed down the process and really trimmed the fat on the lessons needed to dip your toes into this pond.

Certain apps make investing so easy; you do not even have to monitor them beyond an initial set up. For example, there are apps that you link up to your bank account, and the app rounds up the change on your purchases and invests them on your behalf. True, this is a slower way to build wealth through the stock market, but it is also a straightforward way for beginners to invest with low risk and impact their overall budget.

Improved Communications

Perhaps the biggest benefit from fintech is simply the removed stigma regarding talking about money. Traditionally, money was taboo, and discussing personal finances was considered a poor form or impolite. However, now that the world is moving in a direction where money management is almost an emerging trend, peers find it less uncomfortable to discuss money with one another. While personal finances will likely always remain more private than other life discussions, the more advancements made on the technological side of money, the more open the discussion will become, even if only done virtually. Blogs, customer service platforms, and online communities are all examples of how, in recent times, technology has opened communications for individuals desiring an improved relationship with their finances. Learning about the habits of successful individuals and the potential to apply their practices to your own life and spending habits is an unprecedented benefit associated with fintech.

Bonus video: Fintech and the future of finance | Prof. Arman Eshraghi | TEDxCardiffUniversity


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