Technology is making you broke

Technology brings convenience to every aspect of our lives but it doesn’t come without risk. Sure, it’s a lot easier to shop online, and it’s much faster to tap your credit card and be on your way, but mindless spending causes us to lose track of our money.

According to an online survey by market and consumer information firm, only 25 per cent of Canadian transactions were in cash in 2015. That means a lot of us are using plastic. When money is abstract, it’s easy to lose track and, more importantly, it doesn’t hurt to spend it.

Finance expert Melissa Leong breaks down the best way to use technology without going broke.

The problem with auto-fill
Scientists say with convenience comes more consumption. Research shows that when things are on auto-fill, we actually consume it faster and more of it. We’re also less likely to shop around or compare prices. This is something to keep in mind when Amazon makes its new buying features available in Canada because soon you’ll be able to reorder laundry detergent by pushing the Dash button on your washer or telling Alexa, Amazon’s intelligent voice assistant.

Even with magazine subscriptions or online music streaming services, you can easily lose track. Watch out for “free-trial memberships” that you sign up for and forget about. If the service has your credit card information, they'll charge you if you don't cancel. 

All it takes is one hour every month to check and see if you can reduce waste in your budget. Review your bank statements and your credit card statements. If there’s something there that you think you don’t need or seems expensive, cut it out. If it seems like you’re getting really tap happy at one store or you’re regularly buying a restaurant coupon from a group buying site that you never use, take action.

Links and apps can be bad news
You’ve gotten an email or a text from a friend or co-worker saying, “Check this out,” or “look at this photo of you,” with a link. Delete it. There are links — we sometimes call them drive-by-downloads — where you don’t even realize that your smartphone or computer has downloaded a program. Now your device is vulnerable and someone can take over by remote control. Or you could be a victim of ransomware (after you click a link, a cyber criminal locks your smartphone/computer and demands a ransom to release it).

Use caution when downloading apps. Check out the reviews and the developer of an app before you download it. To be even safer, stick with well-known, popular apps. That way, you won’t accidentally download a program that allows a hacker to watch your every move, text and email.

Consider paying for a strong anti-virus, anti-spy and anti-malware program for your mobile devices and your computer. Opt for reputable software to avoid nefarious programs masquerading as free anti-virus programs. Also, keep all of your software up-to-date. If all else fails, have an emergency safety mechanism — an app that will wipe all of the data from your phone if it’s stolen.

Don’t share passwords, ever
You’re taking a gamble by sharing your financial passwords with any program such as a third-party aggregator. Doing so may nullify your security guarantee with your bank if you ever have money stolen.

This may sound tedious, but read your bank’s mobile security guarantee. Your bank promises to fully reimburse you in the event of fraud, but you have to agree to its terms. These could include: never sharing your passwords (your spouse included), and reviewing your statements in a “timely manner.”

Avoid public Wi-Fi
You just have to be vigilant when accessing public Wi-Fi. You could be clicking on, what they call, evil twin hotspots. A hacker may have set up a rogue access point, in the hopes that people connect to it. The hacker now has access to all of the information on your smartphone or laptop/tablet.

One way to get around it is to pay for a VPN. A virtual private network encrypts data and hides your online activity (sometimes your company or school offers you a VPN to connect to the Internet). You can buy a subscription to a service provider, download the program, and then log in to use it on your phone or computer. 

Make tech work for you
Use tech to help you save money. Banks such as Scotiabank and TD Canada Trust allow you to round up or set an amount to be added to each debit card transaction.
  • TD Canada Trust has a program called “Simply Save.” Every time you buy something with your debit card, a set amount from $0.50 to $5 is automatically transferred to your savings account.
  • Scotiabank has “Bank the Rest” which allows you to round up your purchases to the next multiple of $1 or $5 and the difference goes into your savings account.

Use a money app. There is an app to help you with almost any money issue, whether it’s paying down debt (Debt Manager), organizing your loyalty cards (Stocard), combing flyers for deals (Flipp) or filing receipts (Receipts). Just make sure you do your research to ensure it’s a reputable app and don’t provide your banking information/passwords.

Use your bank app. You can set up an email or text alert if your balance falls below a certain level. If you have easy and frequent access to your banking, you’re going to be able to keep track of your budget and finances in a more responsible way.
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