Technology and personal finance tell a story where the evolution of one affects the other. Over time, technology has improved how individuals and communities deal with their finances.
Personal finance is about an individual’s financial management. It reveals how one earns, budgets, saves, and spends money. As the word ‘personal’ implies, it depends on the individual’s desires and goals. It also takes into consideration their risks and possible life outcomes.
There are five areas of personal finance: savings, investing, protection, spending, and income, and one’s investments, insurance packages, and retirement plans are fashioned based on income, wealth goals and consumption needs.
Thanks to the differences in career choices, age, health, and family structure, these factors differ from person to person. This reality means that the structuring focuses more on the ‘personal’ than the ‘finance’. This personalization ingredient is one advantage that technology rides on in helping individuals meet their financial goals. By employing the technologies of digital banking, cybersecurity solutions, big data, and artificial intelligence, innovators proffer solutions for improved personal financing. This was not always the case.
Personal Finance: Then and Now
The recorded changes in personal finance over the decades are largely dependent on the evolution of technology. Many things have remained the same despite the emergence of various technologies, but technology and finance have emerged together every step of the way.
Financial experts say that wealth is not dependent on how much money is made, but on how much is kept. So, a chief part of personal finance has to do with savings. Hiding funds in holes dug in the earth, safekeeping them under mattresses, or personally taking bundles of cash to the bank, savings have taken different meanings over time. The changes have happened based on technology and awareness. In recent times, people still save in banks, but Fintechs might be giving the banks a run for their money.
The recent misunderstanding with PiggyVest on Twitter and the ensuing response gave a glimpse of how much people depended on the saving and investment app. Many users listed the accrued interest on their savings as the main reason for their patronage, and many pledged commitment to the app despite the possibility of security compromise. A user confessed to getting 15,000 naira daily on his savings in the app.
Investments and retirement plans, until recently, were left to fate for the most part of the population. Only the elites saw a need to invest and plan for retirement. Indeed, it was seen as a privileged activity. Fintechs are changing this narrative and allowing individuals to invest as little as possible. The available investments range from agriculture and real estate to stocks and bonds.
Individuals are responsible for their knowledge and decisions. From an app, one can now decide what to do with their money, making personal finance as personal as possible.
Technology and Personal Finance: How to Take Advantage and Grow Wealth
One would not be surprised at how much power technology gives the individual, as solutions in the digital age lean towards arming the user with privacy. With advanced security, speed, coverage, convenience, and customer experience, digital inclusion is looking like a possible dream come true, but that’s not all. The banked are also served.
Instead of having a third party ask you personal questions and tell you what to do about your money, technology, using AI and data analytics, shows you the most favourable options. Based on your desires, your goals, your earnings, and some possible risk factors, a unique plan can be created for you.
For saving, investing, insurance packages, and retirement plans, there are apps and platforms that give you leverage and choices to pick from. These, mainly fintech, apps, recognize that giving choices to people gives them power over their lives. To take advantage of technology and upgrade your personal finances, follow these steps:
- Read and study as much as you can about personal finances. The knowledge and information formally reserved for experts are now public
- Understand and note your financial reality. Note your income, wealth goals, and consumption needs
- Acknowledge your needs. Realize the need for savings, investment, insurance and retirement plans
- Do your own research (DYOR): DYOR on the best apps or platforms to use for each of the needs in step 2.
- Stay real: When inputting your data into the apps to create plans for you, don’t overestimate the positive possibilities. Consider all of the possible risks you are aware of. This would help you get a realistic plan.
Technology has impacted the financial world in many ways. From automation and payment solutions to easy earning possibilities and micro-loans, the economy improves when technology is employed in the sector. However, when it comes to technology and personal finance, the effect is more personal. Taking advantage of technology to earn, save, manage, invest, and protect your money might be the deciding factor between the rich and the poor in the future.
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