Today, being the master of your own finances is heavily encouraged. Personal finance, investments, and financial responsibility are popular topics for books, seminars, and other information media. Truly, we live in a world that’s ever more aware of the importance of personal finance. And with the continuous progress in the field of financial technology (or fintech), we see more technology that aids personal finance developing even further.
Usual banking activities, such as checking your balance, transferring funds, or even taking out a loan used to take days (if not weeks) to accomplish. But thanks to innovations in the financial technology industry, these processes that take the proverbial 7 to 10 business days to accomplish can now be finished in a matter of minutes.
But despite this convenience, has financial technology truly helped us in mastering our own personal finance? How can fintech help your financial situation? Is it worth the time and effort of learning? These questions are what we will be answering today.
It Gives You Control and Access Over Your Accounts
The biggest benefit of financial technology is that it gives you control over your own accounts. Gone are the days where you have to call a customer service representative to check your remaining balance or talk to an agent just to understand your insurance scheme- these actions are now automated and easily accessible through any computer. We now live in the age of digital banking.
This development has cut the hassle of managing multiple accounts, making it convenient to have separate accounts for different purposes. You can even check any remaining debt or insurance payments. And with the right account connection, you can even find out what bills that need paying immediately. This unprecedented control over your own account empowers responsible use and awareness of your finances. After all, being aware of your own money is the first step to being responsible for it.
It Allows You to Monitor Your Spending Habits
“Live below your means” is a popular saying that we often hear financial gurus talk about. But what does that truly mean? We often think of living frugally whenever we hear this saying, and images of extreme penny pinching come to mind. However, living below your means does not have to be as extreme as that. It simply means to not spend more than you earn- something that everyone should abide by if they want to avoid debt.
Progress in financial technology allows you to use your smartphone or laptop to monitor your spendings. You log every purchase you make, categorize it, and after a few weeks or so, you can at a breakdown of your usual expenses. You can find out whether you’ve been spending too much on cosmetics such as makeup or wigs styling services, or you’ve been eating out too much. This will allow you to reign in your spending, and start being responsible with your money.
Instant Lending and Micro-loans
For a long while, banks were the only ones with the capacity to officially lend money. However, stringent requirements must be met. A decent credit score, a trustworthy history, or support are things one needs before taking out a considerable loan. Enter microloans. With the proliferation of banking software and other similar apps, smaller financial companies have jumped on the opportunity to provide loans through this platform.
Micro-loans and instant lending apps are popular platforms for either companies or peer-to-peer transactions to happen. They take advantage of the internet’s decentralized nature to reach a wider audience. And while their interest rates may be higher than traditional forms of lending, the smaller borrowing limit makes up for it and still entices borrowers. For those concerned with personal finance, apps such as these are the last resort- after all, nobody wants to be buried in debt, be it big or small. However, the nature of microloans makes it a good fallback plan, or a means to get by especially through a financial crisis.
Convenient Investing
Among the ‘crowning glory’ features of financial technology is its ability to connect you to your investments in real-time. You can watch the fluctuation of the stock market, monitor international currency, or manage your cryptocurrency. What once required a large capital and a phone call to the right office can now be done entirely on your smartphone.
Because of this, there has been an increasing number of micro-investors, whose intent is to improve their personal financial situation. Fintech has made investments of different forms accessible to all types of people and made it more convenient to do so as well. In the future, we can expect this process to be even more efficient and secure. And perhaps, with its rising popularity, become something that most of us can afford.
