While most people have been banking and paying bills online for more than a decade, a growing percentage are starting to use technology to analyze their expenses and investments and correct any problems to help meet their financial goals.
I’m not only an advocate of using this new technology to advance our financial lives, I’m actively using it. Rather than simply use technology to check the amount in my bank or investment accounts, I’m using it to make key decisions.
Here are a few ways that you can use new technology to improve your finances:
Set up separate online bank accounts to meet specific goals. Some banks and financial institutions now allow you to set up specific accounts within your main checking account. For example, I’ve established various accounts and titled them to match my goals, such as “Retirement Account,” or “Trip to Hawaii.” If your online bank account has this flexibility, use it to set up key accounts that help you meet your goals. This tactic will allow you to better manage your money to meet your specific needs.
Examine monthly spending by analyzing debit card purchases online. If budget analysis software is too exotic, it only takes a few minutes each month to examine your spending by looking at your checking account online. Go through your online statement and look at all of your expenses for the month to see if your expenses match your monthly budget. You will quickly see if you are spending too much on restaurants, entertainment and other non-essential items.
At the very least, write down five expenses you made during the previous month and vow to save that money in the coming month.
Simply checking the balances in your retirement account each month isn’t helping you reach your financial goals. Use budget tools offered by various kinds of financial software to analyze spending and, if necessary, readjust how to allocate money in your retirement account. Mint.com and other online financial sites are well known for employing software that allows a user to set up categories for spending and analyze how much money is going into each category. You can set up pie or bar charts to track spending.
Investigate whether your bank or financial institution can provide you with this capability.
If you are a military veteran or family member, USAA.com offers an assortment of online tools to help you make strategic money management decisions.
These tools include looking at all bank and investment accounts, including non-USAA accounts, and track spending activity to stay within your goals.
For example, I track my savings each month, and this tool gives me daily information on whether I’m on track to reach my goal. USAA also has a mobile app which enables anyone to use these tools. Technology is making is easier to buy items online and spend money, but it’s also making it easier to help you. Use it to your advantage.