How technology has changed the way we spend and manage our money

September 21st 2020 | Categories: Financial Planning |

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What once used to require a trip to the bank can now be achieved almost anywhere through a few clicks on your mobile. We’ve gone from cheque books being an everyday essential to today’s almost cashless society. While these changes have made managing our finances more efficient it has also raised some new challenges we need to mindful of.


If you would like to discuss your options and how you might manage it from a financial perspective, please get in touch.

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Seemless spending – the end of cash

One of the most direct impacts technology has had on our finances is how we spend and use money.

Cashless society

We have over time, and in line with the evolution of technology, moved into an almost cashless society. We have seen trips to the bank evolve into trips to the closest ATM, to today where most transactions can be achieved through your closest device. The need for physical cash has become somewhat irrelevant, and through the COVID-19 Pandemic, cash has been downright discouraged!

This has had a direct impact on the way we use and spend money. A simple tap of your card or device and you’ve purchased your morning coffee, or perhaps you even pre-ordered your coffee through an app so it was already waiting for you by the time you reached the café.

Prior to COVID-19, the Reserve Bank of Australia¹ conducted a study which supported the view that cash is being used less. It did find, however, that certain segments of our population are still using it quite frequently, including older Australians, those that have lower household income, live in regional areas and/or have limited internet access. Post COVID-19, however, it is expected that the cash trend will only amplify, even into those areas that have been previously resistant to the change as a global crisis can be a catalyst for structural changes. According to the RBA, since 2007, cash has decreased from being used in nearly 75% of transactions, down to approx 30% in 2019.

Our spending habits

We no longer need to leave the house to spend our hard-earned money either! Almost everything can now be purchased online, giving you the ability to quickly compare prices and have your order arrive directly to your door.

There have also been new payment options developed in the rise of buy now pay later (BNPL), challenging and reversing the traditional concept of lay-buy. BNPL options like AfterPay and ZipPay allow you to receive your item instantly and pay it off over time, sometimes with interest-free periods.

The primary benefit here is time efficiency. These technological advancements have created a ripple effect and also impacted the way perceive and value money.


Impacts on how we value money

Research published in the Journal of Experimental Psychology: Applied found that

“the more transparent the payment outflow, the greater the aversion to spending or higher the ‘pain of paying’ …leading to less transparent payment modes such as credit cards and gift cards (vs. cash) being more easily spent or treated as play or ‘monopoly money.’”²

When money is in its physical forms, such as notes and coins,  we tend to place a higher value on the same amount of money than we would during an electronic or card-based transaction. For example, you may find it hard to spend $100 if it was given to you in cash, as you would be aware of every dollar you spent on that transaction. In comparison, you may tap away $100 on your card without even realising.

In younger generations, BNPL also adds to the temptation of impulse purchasing knowing you can purchase an item now for $80 however only having to pay $20 upfront. Ultimately it can give a false impression the value of the item and you may end up buying items you usually wouldn’t or overspending on your budget.

There are also different behavioural instincts around money which can become harder to manage in a cashless society depending on your money type. For example, if you are a “spender” or a “gambler” you may want to consider using physical cash to remind you of how much you are actually spending.

Use our fact sheet to discover your money type

For children of generation Z, money may be something they have had minimal exposure to compared to other generations. Perhaps their pocket money goes straight into a savings account or they are practised at tapping your card from a young age. Only time will tell what impacts that will have on their relationship with money, but research to dates indicates it will be more of a challenge to grasp the true value of a dollar earned and spent.

You may find our guide to talking to kids about money useful


Impacts on how we manage money

Technology has also had an impact on how we manage our money, including how we view and track our money and also how we budget.


A massive benefit of all these digital transactions is traceability! If you want to know where your money is going, you can relatively easily find out. Log on to your bank portal and you have the ability to see all your accounts, balances, and investment performances in real-time right in front of you. Even super balances and student debt fees are now visible using platforms such as myGOV.


We have seen the ATO move to more efficient reporting processes through technology – gone are our annual payment summaries for example. Now, your employer can lodge this for you and the information is submitted on your behalf.  Online processes such as loan applications can also now all be finalised online in a matter of minutes.


With all this transparency comes knowledge. Budgeting has become digitalised, no more hours of number crunching and statement hunting, with an abundance of budgeting tools and resources at your fingertips. You can download our free budget planner here.

There are also apps which can provide you with a complete overview of your spending such as the Money Brilliant app. Money Brilliant syncs all of your accounts giving a holistic view of your expenses, income, spending habits and budget all in the one place. Money Brilliant categorises where you spend your money so you have clear visibility of where any money leaks or budgeting issues may be. No more guessing, you will know exactly to the penny what and where you have been spending. We offer all our client’s access to Money Brilliant for free which is usually priced at $10per month.

Our planners can use this app to help get an understanding of your complete financial picture and help you implement strategies based around these to help you reach your dreams and goals.

We also have our own Invest Blue app where we share updates and insights with our clients, book an appointment and access documents.

Where to take caution

Whilst many positives come with the digital age it’s also important to be conscious of your cyber and security risk, this includes never opening links in emails that seem suspicious, never providing your details online or over the phone with an untrusted source and ensuring you cancel any misplaced cards as soon as possible. A practical tip to protect yourself is to call the institution directly yourself. So if you get a phone call or email, make your own call to that provider and ask if the query is legitimate. If it is, then you can resolve it at that point without the risk of providing personal information to a fraudulent source.

What should you do about it?

As the financial world continues to transform, there are so many opportunities for you to benefit. Check with your financial providers to see what they can offer you. You may be delighted to discover ways to save time and money along the way.

Find your advantage

We are finding the ability to track and manage spending through technology like Money Brilliant particularly exciting for our clients. While we may be spending more digitally which as we discussed can lead to increased unintended spending, the counter to that is using tech to stay on top of things.

Keeping pace

Our world and industry are constantly adapting, and we too must grow and adapt alongside it. It comes down to finding a way to make technology work for you. There are numerous ways the advancement of technology has enabled us to provide a higher level of service to our clients, in the way we communicate, provide information and plan for you to live your best possible life.


Talk to us today to find out how we can help you.

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What you need to know

This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.

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