The “New Normal” in Personal Finance

In generations past, kids needed to understand how to balance a checkbook and iron out a budget. But thanks to modern technology, checkbooks have been replaced by online banking, apps have replaced paper budgets — and the changes don’t stop there. At nearly every turn, other new competencies and gadgets have superseded old-school “hard skills” in personal finance, ushering in a more modern, tech-based conventional wisdom.

Online banking: the new checkbook

Learning how to balance a paper checkbook used to be a non-negotiable component of personal finance classes in schools. And while reconciling the books is still an essential skill to keep your finances in the black, the mechanism looks a little different.

For instance, many modern bank users rely on their bank’s website to view recent transactions and past statements. Thanks to an increasingly digital world, you can view when transactions post in near-real time, simplifying the process of tracking purchases and determining balances. No manual calculations are necessary.

But first, users need a solid computer and internet skills and should be incredibly familiar with their bank’s online interface. For those with multiple accounts, aggregators offer an overview of all accounts, providing a complete picture of financial health but adding yet another learning curve. And still, even with the perks of automation, all hard skills shouldn’t be abandoned. Since check or wire transfer transactions don’t post immediately, account holders still need a general awareness of how much money is going in and out to avoid overdrawing.

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The convenience – and savings – of moving money online

In the past, frequent trips to the bank were common to deposit checks, transfer funds and manage other affairs. But modern online savings accounts have replaced these outings and often provide better benefits and flexibility.

Using an internet-enabled device, savers can manage accounts from anywhere and move or deposit money with just a few clicks. Many online options are high-yield accounts, meaning users can earn more interest on their savings.

However, while online savings accounts offer slick, user-friendly features, adding yet another website to your daily mix comes with a short learning curve. And though this money is liquid, timeframes can vary when transferring money between accounts. So, banking customers should study their account terms to ensure their cash is available when they need it.

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From pencils to tapping: budgeting in the digital world

Balancing a checkbook doesn’t just ensure you keep up with bills – it also makes budgeting easier. But gone are the days of using pencil and paper to outline a budget by hand. Instead, modern budgeters often rely on digital budgeting apps that are faster and more effective (once users learn their way around).

Digital apps usually boast features like account linking, payment due date reminders, automated savings and charts that visualize where money flows. But because these apps remove the need to sit down and actually “budget,” it’s too easy to put your finances on autopilot. Users should undoubtedly embrace these budgeting tools, but they should occasionally tweak their settings to ensure their digitized budget still serves their needs.

Goodbye, plastic cards – hello, digital payment information

The days of rifling through a card-stuffed wallet are behind us, replaced by the convenience of a cell phone. Specifically, mobile payment systems such as Apple Pay, Google Pay and Samsung Pay have been built into many modern devices.

Digital wallets are software-based “wallets” that store payment information, passwords, digital coupons and government-issued IDs. They permit users to quickly and securely make purchases and pay bills. But as merchants increasingly adopt the technology required to use them, learning how to “tap and pay” will become a necessity — not just a handy convenience. And similar to the proliferation of debit cards, payment methods that make it easier to spend also make it easier to blow through money. Again, it’s more important than ever to maintain awareness of your cash on hand.

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Staying current with automated bill payments

Automatic bill payments are periodic financial transfers on a preset schedule to cover regular bills. Generally, they’re easier to set up and manage than writing out multiple monthly checks. They also offer greater security than leaving a check in an unguarded mailbox and even minimize the risk of forgetting about bills.

That said, they do come with unique challenges, such as remembering to initiate bill pay for each new bill. And also, the payment cycle may be the same each month, but the bill amounts vary, especially for fluctuating expenses like utilities. Users who don’t keep their accounts “topped up” may find themselves on the red-letter end of a nasty overdraft notice.

Manual calculations might be a relic of an analog past, but users still need a handle on their earnings, spending and saving. Instead of ditching the hard skills of yesteryear, navigating modern personal finance involves adapting old knowledge to new devices. With tech-savvy and mathematical know-how, customers old and young can get the best of both worlds.

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