How to manage money in the digital age

Online banking and digital budgeting apps have made managing money and tracking personal finances easier than ever in today’s digital age. However, according to a 2020 Minting Agency survey, only two-thirds of Americans actively use a budget.

With inflation set to reach 7 percent in January, it may be time for more people to downsize and tighten their money management. The U.S. Senate Finance Committee estimates that the average American will spend an additional $3,500 this year just to keep up with inflation with standard annual spending.

Start keeping track of everything

In a digital world, there’s no need to keep paper receipts, organize file folders and keep meticulous ledgers to track income and expenses. With online banking and credit card transactions, 24/7 bank accounts and debit card transactions, it’s not that difficult to gather everything you need to get an idea of your spending habits and financial life.

If you haven’t already budgeted, the thought of seeing your money habits throughout the day can be intimidating. But it’s even more dangerous to be in the dark. Financial literacy and estate management begins with addressing personal financial concerns.

Be clear about where your money comes from, where it comes from and how you pay for it. Don’t forget about Amazon purchases and streaming subscriptions. To do it right, you need to take a close look at all the payment systems that use digital money.

Review the basics of budgeting

You can make a strong start by solidifying your knowledge of budgeting methods and reasons.

Next Generation Personal Finance (NGPF) has a free curriculum to teach children about personal finance and increase financial illiteracy for the next generation. The Budgeting Division provides an informative guide for budgeting representatives of all ages who want to supplement their knowledge of the basics.
The Consumer Financial Protection Bureau (CFPB) provides trackers as well as useful background information on income and expenses.
The Federal Deposit Insurance Corporation (FDIC) provides several podcasts and online resources on personal finance and financial literacy.
The knowledge you need to get started is open and will help you understand what you want when choosing the right personal finance tool for you.

Choose a fund management tool

It’s not hard to find the tools you need to get the job done. A rich new technology called Fintech allows anyone to use the financial services and features they need to manage their money. It’s just a matter of finding something that fits your needs and can be easily integrated into your life.

Most personal finance apps can be related to current accounts, credit cards, loans and investments. They will track your spending habits and develop a spending plan based on your money habits and financial goals. Some can diversify the experience with tasks and goals to make financial planning more fun. And it all gives you a real-time view of your financial life at any given moment.

There are also a growing number of apps that can track digital currency and cryptocurrency investments.

Mint currently supports 15 different encryption platforms. If you have a coinbase account, you can connect to your Mint account immediately.
Personal Capital and Monarch provide financial planning and retirement information along with standard budgeting tools with dashboards that track investments in financial markets and other aspects of asset management.
Quicken Simplify lets you create spending plans and track your progress in real time, so you can get an idea of your budget progress at any time.

Prices for these and other financial planning apps vary. Most are free, while others charge up to $100 per year. By choosing a paid plan and following it, you can quickly make up the savings while better managing your personal finances.

Updated Envelope System

Today’s new technology and widespread online availability make apps a popular and convenient choice for money management. However, if you don’t need another app or are looking for a low-tech solution to track and manage your personal finances, you have options and you can update them in a new way.

Envelope Budgeting in its simplest form is a financial system that helps you track and control your spending habits by using physical envelopes for each expense category, such as rent, groceries, utilities, etc. Each envelope is labeled by category and filled with an amount attributed to the cost of the month.

When you need to pay a bill or pay for a grocery trip, money is withdrawn from the appropriate envelope. You keep track of your money habits by trying to write money out of the envelope intelligently. The idea is to improve your money management and eventually make some savings.

Since we don’t pay much in cash anymore, some fintech applications like YNAB (You Need a Budget) and Goodbudget use this system, which has been updated for the digital world. You can set up a similar process with spreadsheets and multiple bank accounts, debit or credit cards.

Create an “envelope” or budget category.
Allocate $1 each.
Set up a method of payment.
Keep track of when you will overspend or underspend.
Make a plan for how you will save money.

Perhaps the money you save will go into a savings account, go into an entertainment fund, or turn into digital money or other investments.

Smart spreadsheets

If you like reliable old-school spreadsheets for financial planning and tracking, you can upgrade that personal finance system with new technology.

Platforms like Smartsheet can use the same formulas and formats, updated with the ability to download and save receipts, online bank statements, tax documents and invoices.

Smartsheet provides a personal budget template to get you started. You can also set due date alerts and create dashboards to see budgets in real time at a glance.

Stick with it.

There is a budget system for you. Whether you use the power of digital apps or track your consumer habits with spreadsheets or notebooks, it’s important to integrate and maintain budgeting in your financial life.

You can get an app and plug it into any banking service, but you won’t get any use out of it unless you fully integrate it into your life.

A new generation of money management tools has emerged in the digital age, but you still play the most important role in your financial literacy and money management. Choosing the right tool for you is the first step to taking control of your personal finances with your money habits in mind.