How to Organize Your Finances with the Help of Technology

During a family get-together on the occasion of Holi this weekend, we were discussing about how our lives have changed over a year due to the COVID-19 pandemic, and my aunt said "It was a difficult task to work the banking transactions or manage financial investments, as with the lockdown constraints we had to conduct financial transactions online and the digital world was new to me. But, eventually with time I could adapt to the change and understood how technology can help me manage my finances better and it is time saving too."

To which I responded, "Yes aunty, technology will significantly enhance the way you manage your finances saving you time and assisting you in investing money efficiently by keeping track of your expenses and investments."

Many senior individuals who are less tech-savvy are reluctant about using technology, despite the benefits it offers, to manage their finances. This is usually because of a lack of knowledge or incidents such as financial frauds that deter one from entering the fintech environment.

In this article, I will guide you with some ways that technology can help you organise your finances in a convenient and effective way, so you could save and spend your hard-earned money wisely:

1. Online Banking

In the past, managing your finances was limited to methods like visiting your bank or financial institutions to deposit savings and/or invest your money in bank FDs, mutual funds, and bonds; or to apply for a loan and various banking requirements. Although it helped fostering a close relationship with your bank interacting with bank professionals, it also was time consuming.

When you switch to online banking, you can easily manage all your banking requirements on your fingertips and have a better control over your finances. You simply need to inform your respective bank to set up your internet banking services (i.e. net banking and mobile banking). Here you get access to all your financial information with the bank and can manage your transactions online without investing the time to visit the bank.

Many banks have their own mobile banking application with various services like; funds transfer, order a chequebook, download your account statement, etc. It also eliminates the issue of banking hours as online banking offers you services 24x7. Online banking helps you keep a check on your bank account regularly to avoid any fraudulent events.

2. Mobile wallets / E-payments

With the mobile wallet application, you can receive and make payment online for any kind of purchase. This was promoted to create a cashless economy, your e-wallets are linked to your bank accounts making it easy for you to receive and make payments via the app online without using cash or even the online banking tools.

Recently, an online mode of payment the famous UPI interface was introduced by NPCI, an RBI regulated entity. UPI app allows you to receive and make payments to any individual who has their mobile number linked with their bank accounts. This attracted many individuals amid the pandemic in accordance with the norms of social distancing avoiding contact with exchange of cash.

It is a much easier way of performing transactions below Rs 1 lac. This app helps you keep a track of your expenses, saves time, gives access of several services (bill payments, mobile recharge, funds transfer etc.), offers you various rewards, and most importantly provides a proof-exhibiting receipt for payments.

3. Budgeting made easy

Budgeting is a vital aspect of handling your money because it helps you control your cash flow, maximise your savings, and avoid debt. However, it takes a lot of time because it entails sifting through different invoices, expense receipts, account statements, and other documents.

With the help of technology, you could use various applications to assist you in monitoring spending, categorizing expenses, investing in your portfolio, clipping coupons, and tracking receipts. It was difficult to effectively forecast your spending in the past, but now you can easily watch your expenses and balance them against your income with the help of budgeting software or applications.

If you perform transactions online through internet banking, mobile wallets, debit/credit cards, it will be tracked by these budgeting tools to update your budget. Since they are synced with your bank accounts, it will provide a snapshot of your financial status, allowing you to make informed financial decisions.

4. Automate your bills/savings

Developments in fintech now provide you with automated services to receive your paycheck and manage your savings easily each month. You just need to inform your bank to avail of the automation service and transfer an allocated portion of your income on a particular day or paycheck day into an emergency fund or savings of your choice.

Notably, this automation technology is also beneficial for making payments towards your monthly bills and it will prevent you from forgetting and attracting a penalty. You could plan your bill payments accordingly and automate them. For example, you could automate your electricity bill payments or your credit card dues to avoid any late payment charges.

Automating your payments and savings relieves the stress of missing out on an important transaction and helps you with time management too.

5. Investing for future

Besides managing your day-to-day expenses, you also need to plan for your future by investing into various financial products that help your in wealth creation. Earlier you had to visit a financial advisor to make investments. With the help of financial advisor, you could manage your investments easily, but now there are several websites and applications that help you in building DIY investment portfolio.

However, financial literacy plays an important role here, which empowers you to make informed financial decisions and invest in worthy investment avenues being aware of your financial goals, risk appetite, and investment horizon.

Such investment and stock trading websites/applications make it easy for an investor to track his investments and its performance; it also helps you develop a habit of regular savings. You could automate your investments as well, by investing in SIP (Systematic Investment Plan) that will allocate a certain amount from your bank account into a mutual fund scheme of your choice on a selected date each month.

With the help of technology, an investor has transparency over investments and does not need to rely on a financial advisor completely.

To conclude...

The market for digital payments in India is expected to rise. In a recent news, Mr Mahendra Nerurkar CEO of Amazon Pay, the digital payment arm of e-commerce website Amazon, informed patrons that their organisation is willing to include multiple services from insurance to credit via Amazon Pay.

Such technological advances in the field of finance will offer you several resources to fulfil your financial requirements and help you organize your finances and have a better control.

Ultimately, technology provides you with numerous ways to improve your finances for a better financial future. Less tech-savvy individual must learn to embrace technology and use it effectively to improve your financial health.

However, technology also has some drawbacks, i.e. you need to be alert and cautious. You must safeguard your financial information and avoiding sharing any sensitive data over a call or e-mail, prevent clicking on unfamiliar links in text messages or e-mails. Many fraudsters will impersonate bank representatives and request you to share financial information. Under no circumstances must you reveal your personal financial details.

Maintain your financial safety when making transactions, check for safe browsing websites, and avoid using publicly shared Wi-Fi connections.

You see, if you are financially conscious, it will be convenient for you to manage your finances better, you will understand the importance of safeguarding financial information, and it will help you build confidence to embrace technology and its various benefits to organise your finances.

You need to empower yourself with the weapon of financial knowledge and this way you could guide your family in making financial decisions and help them understand the benefits of technology to manage their finances. We understand that not everyone in your family may be well equipped with financial knowledge, but you could guide them by becoming your family's 'Financial Guardian'.

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Organised into eight modules with 24 extensive videos, the "Certified Family Guardian" will help you with all the relevant tools and learning modules needed to get better at money management and making informed financial decisions for yours and your family's secure financial health.

It also offers a host of other benefits to help you make informed investment decisions. Read here for complete details.

So, if you wish to understand the nuances of financial management and have better control over your finances, enrol for "Certified Family Guardian" course today!

Warm Regards,
Mitali Dhoke
Jr. Research Analyst

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