Now that we’re all familiarising ourselves with the virtual world, the question is: are you using the right tech to help you manage your finances? With most of us opting to make payments via debit or credit card, cash seems like a thing of the past. Transactions have moved online, for the most part, but does this mean we’ve got a grip on effectively managing our money?
Once you immerse yourself in the world of technology, the possibilities are endless. With a huge amount of apps to choose from to aid your financial planning journey, where do you start? Luckily, when it comes to using tech to manage your finances, we’ve got some suggestions to point you in the right direction.
Here are our top tips for managing your money efficiently:
Register for alerts
Shop around for a bank account that suits your needs and helps you stay on top of your money. Alerts are a great and simple way of making sure you’re on track to achieve your financial goals. Look for a bank that offers personalised alerts. Depending on what you want to know about your money, you can arrange for alerts to let you know when your balance goes above or below a certain level, and if large payments are going out or when you get certain payments in, to name just a few examples.
Track your spending
To keep things simple, why not consider an app that allows you to view all of your accounts in one place. Your very own one-stop-shop for tracking your spending and saving across multiple accounts. In recent years ‘open banking’ has changed how people spend, budget and save money. It essentially allows you to connect your financial information to an app or bank without any security worries.
So, what is ‘open banking’? It is a series of reforms that means all UK-regulated banks have to allow you to share your financial data with budgeting apps or other banks, but only with your prior permission.
The intention is that it’ll bring more competition and innovation to the financial industry, which will result in better products to help you manage your money.
You don’t have to share your information in this way, it’s your choice.
Some of the mainstream banks offer open banking such as HSBC, Barclays and Lloyds. However, they may have their limitations. There are also plenty of third-party apps to choose from, where you can track your spending, set budget goals and transfer money between accounts.
TOP TIP: Make sure you do your due diligence on the app you choose to use. Some apps don’t hold your money, others do. Some use ‘screen scraping’ rather than Open Banking, which leaves your information more vulnerable. Whichever finance app you use should be using Open Banking, regulated by the FCA and if they do hold your money, check the FSCS protection.
You can check the app you want to download uses open banking by going to openbanking.org.uk. You can also check if they are a genuine regulated company at register.fca.org.uk.
Spend a little, save a lot
Many online-only banks have introduced savings feature that allows you to round up your money to the nearest pound, with the excess going into a separate savings pot. So, each time you make a payment, you spend a little more, but over time you could be saving a significant amount.
Unlike ‘open banking’ apps, if you opt for an online bank account app, your money will be held with the bank/app provider. Please make sure you do your research before opening an account; check the FCA register and the FSCS protection, as mentioned before.
Watch out for any apps that offer an ‘e-wallet’ solution, these will not have FSCS protection. You can check FSCS protection here using the FSCS protection checker tool.
Please note, many online banking apps can be beaten on interest, but offer budgeting features and instant notifications that more traditional banks might not offer.
Most open banking apps or online banking apps let you set budget goals. You can load as much information you want into them to help you plan your finances.
One thing we would recommend is that you consider the data you are putting in and handing over to any apps out there and whether you feel comfortable with that.
Like us, we are sure you are thinking about your first trip away once we are out of lockdown (if not take a look at our post-social distancing bucket list ideas). So, it’s always beneficial to have an account that allows you to withdraw cash for free when you’re abroad. It stops you having to dash to the foreign exchange counter to get all of your money for your upcoming travels (although we do recommend you have some local currency handy).
A couple of online banking apps offer fee-free cash withdrawals and spending when you’re abroad. They also send you spending notifications and have built-in budgeting to help you avoid the temptation of a holiday splurge. There may be a monthly limit on the amount of fee-free cash you can withdraw but it saves a lot of hassle if you go on holiday, or work abroad often. So make sure you shop around if this is a priority for you.
If you would like to know more about financial tech or want to discuss an existing plan, please get in touch and speak to one of our Financial Planners.