Americans don’t have enough savings to cover even the most mundane of financial crises. According to CNBC, the majority of people – 51% – have less than 3 months’ worth of savings, meaning a loss of employment could potentially spell total disaster.
This is a key indicator to overcome for both national and state planners, and it's something that the technology industry has sought to overcome. Bit by bit, tech tools have created a new reality for Americans in which saving is easier, and financial lessons are readily at hand.
Saving by the cents
The pandemic taught Americans to start saving, according to NBC, but there’s a curious angle to how they’re doing it. Rather than saving large portions of their income, as is recommended by financial planners, they’re instead doing what they can – even if that means a few cents every day. The driver behind this are smart finance tech platforms.
Modern saving apps bring with them planning tools and unique methods for collecting funds. Rather than demanding lump sums, they’ll help shoppers to save a little from every transaction, or to save a few dollars on a purchase, and then put that aside into the savings pot. For many, this is a more realistic way of saving.
Demonstrating goals
Another way in which savings apps have helped is through presenting clear goals. Between interest rates, amortization, inflation and mortgage spikes, saving for anything can be an excruciating process. Through the use of goal-setting, and integrating the likes of interest rates and up-to-date fees into their apps, savings platforms have given clear dates and ways to improve to consumers.
Being able to see exactly where your money will stretch, and what you need to do to bring goals closer, is an important reality check and one that will make saving money easier, rather than harder.
Knowing the legal side
Multiple news outlets recently profiled Plug and Law, a new legal tech app that seeks to demystify the banking and purchasing process, and provide lessons on the way. Providing this sort of information on an open basis is another goal of financial tech, and is a crucial step for savers. Often, you can reach the end stage of a savings goal, for instance having the money for a property, only to be bitten by hidden fees and charges.
This can put a serious dent in the affordability of a property – especially in a housing market as hot as America’s – and be a seriously demotivating experience to go through. By having the full range of information out there from day one, and a string awareness of legal rights, another string can be added to the saver’s bow
There’s not much that savings tech is doing different, in essence. It’s simply opening up the field and providing information that those knowledgeable in finance have known for a long time – free of charge. The convenience and gamification of saving will benefit everyone in the long run.
