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How Technology Affects Spending Habits

For years, a popular piece of spending advice suggested that paying with cash, as opposed to credit cards, is a better way to manage money.  Every time you pay with cash, it’s money out the door, which psychologically internalizes the expense and helps you budget since you can more clearly see what’s left over. With plastic, the school of thought says that spenders are more likely to spend more. The abundance of credit cards and easy application processes make it easy for people to spend beyond their means. In fact, this is how many people fall behind in monthly payments, accrue debt, and eventually face the threat of bankruptcy.

While minding your credit card spending has always been important and remains important, companies are leveraging online platforms to make spending easier than it has ever been before. Websites are now today’s storefronts, and payment options are numerous. With Bill Me Later, PayPal, debit, credit and more, companies want your money any way they can get it. With device use on the rise, companies are creating e-commerce sites and apps that are compatible with smartphones and tablets, not just your desktop. They want you shopping when you’re home, when you’re at work, and they want you shopping when you’re looking at your phone on the bus.

Mobile spending is booming. TechCrunch reported that eBay saw a 133% increase in mobile spending volume on Thanksgiving this year compared to last year. PayPal says that Thanksgiving resulted in a 173% increase in global mobile payment volume compared to last year. These figures suggest that mobile is becoming more and more the platform of choice.

The ease of mobile spending is the latest update to the age-old saying about paying with cash versus credit cards. With mobile spending, often all you need is one click to pay. At least with a credit card you have to actually pull it out of your wallet! Of course not all advances in online commerce are bad; you can wait for and monitor sales more easily, for example. Online banking has made it easier to review balances, submit payments online and budget for expenses. Figure out what works best for you regarding ways to manage your money, and stick to it. If you face bankruptcy or are burdened with debt, please consider contacting McFarlin LLP. We’re here to help!