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Applications about our personal finances are becoming increasingly popular.
But the question is, do they make us better at managing our money or do they encourage us to spend more?
Kerry Hudson, 28, spent her childhood in Scotland living in poverty with her single mother, in “a succession of social housing, homes for the homeless and caravan parks.”
He lived in seven different places before he turned 15, and attended 14 different schools.
“I was always the new girl with the strange accent and the cheap and wrong clothes,” she recalls. “They made me bullying every day in high school.”
She found solace in books and the peace of the library, and eventually became an award-winning writer.
His most recent book, Lowborn , is about people growing up in poverty .
But even though for years he dragged a constant and persistent fear of falling back into poverty, it was not easy for Hudson to manage his finances .
He always “ran out of money” before charging.
That happened to me “because I was not tracking, which is obviously fine when there is a fixed day of payment, but you can not afford that when you are freelance“.
So he sought help and found it in the form of an application. Although there are many, she chose the Revolut .
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“It gives me a breakdown of what I’ve spent and, if it’s often too much, I know I should be more careful the following week,” says Hudson.
When you make a budget, put a certain amount weekly on the card and stick to that.
The application also has an automatic savings system and free cash withdrawals abroad of about $ 260 per month.
Global downloads of financial applications reached 3,400 million in 2018, which is 75% more than three years ago, says analyst App Annie.
Its popularity is growing more rapidly in emerging markets , such as Brazil, India or Indonesia. Facilitating the sending of money to other people seems to be one of the main reasons for their popularity in these countries.
The three most downloaded money applications in the world in 2018 were Google Pay and PhonePe in India, and Alipay and WeChat in China.
All four focus on sending money as a main function.
“I receive an instant notification and it informs the moment of a transfer to whoever expects to receive it,” says Rachna Ahlawat, co-founder of Ondot, an application that allows users to activate and deactivate credit and debit cards only with their cell phones.
In the United States, 92% of young people between the ages of 18 and 37 use financial applications, says Annamaria Lusardi of the George Washington University School of Business.
And they do it mainly to control expenses and pay bills .
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Changing how we spend these applications and saved?
It’s hard to say, but Georg Ludviksson, executive director of financial technology firm Meniga, based in Reykjavik, says people who start using financial applications spend 7% less on average in the next six to twelve months.
But he admits that breaking credit cards can have a bigger impact on expenses.
His company is developing customized banking applications for entities such as the Spanish Bank Santander, the Swedish Skandiabanken and the Dutch ING Direct.
Regularly reviewing where we spend our money seems to be key to making a successful budget.
“If you are constantly reminded of how much you have spent, it is more painful to pay for the next article,” says Rufina Gafeeva from the city of Cologne, Germany, who investigates how technology changes our spending patterns.
But if the applications to pay simply make spending money easier, with less emphasis on managing the budget, we may end up spending more than before using the application, he warns.
To prove this, you just have to think about how fast and convenient it is to pay with contactless systems .
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According to Lusardi professor, almost a third of people aged 18 to 37 who use payment applications through mobile or contac t less in the United States sometime have entered red numbers compared to only a fifth of users that do not use this technology.
“When does convenience become dangerous?” Asks Steve Tigar, executive director of Money Dashboard, a popular financial management application.
“I’m not sure, but either you reject them and you stay out of the digital economy or you accept them and put in place a safety net that allows you to control your money.”
Money Dashboard makes your past expenditures evident by allowing you to see all bank and credit card accounts in one place and classify transactions to show what a person spends more.
“The best [money applications] are trying to be like Facebook,” says Georg Ludviksson.
“You read your feed, your transactions are there, but also some ideas and details about what you are spending,” he says.
Economists on the behavior of Harvard Business School and the University of Edinburgh found that people who use Money Dashboard “saved about 40% of discretionary spending,” says Tigar.
“[There is a] correlation between people who consult the application regularly and their ability to adjust to a budget,” he says.