Convenience apps make it easier to spend over your budget
IN TODAY'S digital world, there's a mobile phone app for just about everything. It can make life easier but convenience can come at a cost.
Mobile apps span the full spectrum of needs.
However, a UK study confirms that convenience apps can have a negative impact on our finances.
First, let's clarify exactly what is meant by convenience apps.
They're the phone apps that let you order takeaway food without the need to leave home, or those that get your laundry done and returned to your home.
Convenience apps also include those that let you avoid 10 minutes at the bus stop and head straight to your destination via private car.
And in my books, convenience apps also include the "buy today, take home today, pay later” apps that have left traditional lay-by looking a little ... well, less instant.
According to one UK survey, 76% of respondents said convenience apps make it easy to spend more than they wanted.
Seven out of 10 made no allowance in their budget for spending via convenience apps, and around one in five had no idea how much they spent each month on convenience apps.
These responses are all red flags for the impact convenience apps can have on our financial wellbeing. And I suspect the same survey results would apply here in Australia.
The findings aren't really all that surprising.
I've encountered plenty of other research that shows the more we become detached from cash transactions, the more we tend to spend.
And, the harder it is to keep track of what we're spending.
The solution is not always to abandon convenience apps altogether.
The key is to go back to basics, and keep a monthly budget.
That said, the days when we could track all our spending by looking at receipts and invoices could be over.
Your bank account, credit card statement and even PayPal account may offer more realistic insights.
On the plus side, plenty of apps can also help you manage your spending.
MoneySmart's TrackMySPEND can be a good choice - just be sure to include spending made via your digital wallet.
And if your regular spending starts to blow out, consider sticking with cash - it's a great way to see where your money is really going.