Can technology lead to financial laziness and prevent you from tracking your finances? Possibly. Today, people can easily buy something by swiping a debit or credit card through a card reader. They can store payment information with online vendors and make purchases with just a few mouse clicks. They can even check their bank and credit card balances by simply going online and looking at the total balance. Do you rely on these technologies to track finances for you? Not tracking your spending can have serious financial consequences and could eventually damage your overall financial health.
Obstacles to Tracking Finances
Not remembering transactions: Simply looking at your bank account balance or credit card balance online without carefully reviewing your statement can lead to trouble. Some transactions might not have posted by the time you check your balance, making it seem like you have more money available.
Before debit cards became widely used, many people balanced their checkbooks immediately after writing a check. Smart consumers considered this money “spent” before it even posted to their accounts. This is still possible in the debit card era but requires work on your part. Keep a notebook or some other item with you and write down transactions every time you make one. Compare that against your online statement to know your true financial standing.
Not realizing how much you spend: Debit and credit purchases happen quickly and often don’t “feel” like spending. Writing checks is more time consuming than swiping a card. You have to manually write out who you are paying and the amount—in numbers and longhand. This can lead to more awareness as to how much you are actually spending. Reaching for cash from your wallet and handing it to a cashier can have the same effect.
While swiping a card is much faster, it can lead to a disconnect as to how much you are spending. If you need to use a card, keep a log to track finances and spending. This could help the purchases feel “real” and will make you more aware of the money you are spending.
Storing payment information online: Making purchases with just a few mouse clicks can also cause you to lose track of your spending habits. This becomes a problem for consumers who have saved their payment information with online vendors or websites, especially auction sites. Actually typing in your credit card number every time you make an online purchase can lead to more awareness of how much you are spending. Again keep track of what you are spending.
Also, keep in mind that identity theft is always a possibility when entering your payment information online. Be vigilant of your statements and evaluate them thoroughly. Be sure to only give your information to reputable sources online.
How to Track Finances Despite Technology
Technologies like debit and credit cards and online banking can bring consumers a new level of convenience. The problem is that these technologies also make us less aware of the money we are spending, and they may make tracking your spending difficult. Keeping a record of every transaction you make is a great solution to this problem.
The speed of business and transactions probably won’t get any slower in the foreseeable future. After all, merchants don’t want consumers to have a difficult time spending their money. By keeping a notebook or using another method to track expenses, you can avoid some of these dangers. Clearpoint hopes you can be a financially healthy consumer and stay aware of the purchases you are making and the money that is coming and going from your bank account. If you are strugglin to track finances, ask to speak to one of our certified credit counselors by calling 888.737.2933.