How Technology is Transforming the World of Personal Finance?

Personal finance has never been more important in the wake of ever-increasing inflation and world events that are shaking the global economy. With Europe reeling from the war in Ukraine and the USA set to increase tariffs on all imports, inflation will rise again.

What can the average man do to prepare for this? Well, they can improve their personal finance and supplement it with technology.

Personal finance, if you don’t know, is the art of managing your income and expenses personally. It involves various things like budgeting, investing, saving, and, of course, taxes.

Today, we will teach you how different technologies can help you better manage your personal finances. By employing these tools and technologies, you will be empowered and have a clearer picture of your finances.

How Technology is Improving the World Of Personal Finance

Here are seven ways technology is improving the world of personal finance.

Budgeting and Expense Tracking with Digital Tools

Budgeting is the process where you determine your income and expenditure. To budget properly, you have to know how much money you are earning and how much you are spending.

Now, knowing the earning part is easy. For most people who do a job, their salary is their earnings (after taxes, of course).

Tracking expenses, on the other hand, is more complicated. You see, it is easy to track the big expenses like bills and payments. However, it is the smaller, more recurring expenses that go unnoticed. For example, you might not think much about your daily coffee, but it is a small recurring expense that adds up to be quite substantial.

Tracking such expenses can paint a clearer view of your budget. Here are some things you can do to stay on top.

• Take receipts and invoices for everything you purchase (products and services).
• Take photos of the receipts/invoices if they are physical instead of digital.
• Use an image-to-text converter to convert the photos into editable text.
• Save the data in a spreadsheet.
• Use Excel formulas to add all small recurring expenses to see how much they eat from your income.

It can sound like a bother, but having a working knowledge of Excel and creating spreadsheets is a necessary skill for personal finance. Once you have created a sheet, it is easy to recycle it for further use, so it is cumbersome exactly once. In the long run, it will help you manage your finances better.

The Rise of Mobile Payments and Contactless Technology

Earlier, we talked about tracking your small recurring expenses. We discussed manually converting physical receipts into digital ones with an image-to-text converter.

This is not always necessary. Many businesses have started moving to contactless payments. They support different wallet apps like Venmo and Paypal.

The most common method of contactless payments is to use a QR code. Businesses generate a QR code that customers can interact with by using a QR scanner.

The said QR scanner can either be a 3rd party tool or integrated with the wallet app. The main advantage of contactless payments is having a digital record of your expenditures. It is also easier to import a digital record into an Excel sheet.

Digital payments are also more transparent. You are always given an itemized invoice that has more details. This also means you get more insight into the added costs that accompany your regular expenses.

Investment and Financial Planning Tools

Budgeting is the most fundamental aspect of personal finance, but it is far from the end-all-be-all. Investing and savings are also prominent aspects of your personal finances.

However, many people are just too scared of investing in anything. They believe that they don’t have enough funds to invest or that the investment may yield no returns.

This is mostly due to the lack of insight. When you have an accurate view of where you stand financially, it becomes easier to free up funds for investments.

There are several financial planning tools to help you with that. Financial planning tools like Quicken and Greenlight provide multiple features like:

• Expenditure and income tracking
• Investment tracking, i.e., tracking returns on investments.
• Goal management (i.e., saving for a big purchase)
• Reporting

With these tools, you can use goal management to save enough funds for an investment. Then, you can track your investment and see how much return you are getting.

Credit Monitoring and Fraud Detection

Due to the different technologies we use today for transactions, bad actors have found new ways to exploit them. Now, the good part is that the actual technologies are safe. It’s the human component that is exploited.

Scammers will portray themselves as legitimate organizations or institutes and try to dupe people into paying them. The most common approaches they use are:

• Phishing with emails and SMS.
• “Calls” from your bank or wallet apps customer service center.
• Malware that infects your device and steals information.

The worst thing about this? Many times, you won’t notice you have been compromised.

This is why wallet and bank apps/websites now use two-factor authentication. They ask you to provide a one-time pin or use your biometric authenticator to commit to a transaction.

But it does not hurt to be prudent. That’s why you should use a credit monitoring service. Such a service notifies you of any changes to your credit score. In the event of identity theft and credit fraud, you will be notified immediately and take immediate action to prevent further harm.

Conclusion

Technology has revolutionized the way we do personal finance. We no longer have to count cash and store pennies in a jar. Today, everything is done online with apps and websites. Using services that help you manage your finances can empower your life and secure a better future.

 

 

 

 

 

 

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