There’s no doubt that technology has made our lives easier.

We can now communicate instantaneously, share photos with our loved ones seconds after we capture a special moment, and a world of information is simply a click away on the Internet.

It has also transformed the way we shop and pay for goods and services. Most of us now use cards instead of cash, we check bank balances and transfer money using our phones, and we can buy just about anything at anytime - without leaving the couch.

While these technologies are convenient, there’s a pretty good chance that they are derailing your finances - whether you are putting money away for a home deposit, paying off a mortgage or saving for a big-ticket item.

Living in a cashless society

A recent survey by the Reserve Bank of Australia has revealed that Australians are now making more card than cash payments, in a trend largely driven by tap and go technology.
Cards are now the most used consumer payment method accounting for 52 per cent of transactions, while cash sales have dropped to 37 per cent.

The Mastercard Digital Purchasing Survey revealed that Australians have become so accustomed to the convenience of tap and go technology that more than 33% are annoyed when a merchant doesn’t offer the option.

With ‘tap and go’ technology, it’s highly likely that the only thing you’re saving is time – not money. Sydney University marketing and behavioural psychology professor Donnel Briley said research shows people spend up to 40 to 50 per cent more in a transaction, particularly on small items, when they pay via card.

If we're not handing over cash, it doesn’t feel like we are spending real money.

Transfer money - anytime, anywhere

Online banking and banking apps have revolutionised our access to money.

A survey of 2000 Australians found that almost one in four Australians check their mobile banking app or online banking platform every single day.

Australia’s most popular banking apps generally allow you to check your account balances, schedule new payments, transfer money and even use your smartphone as a bank card to purchase items via tap and go.

The ability to transfer money from account to account and dip into your savings – anytime, anywhere - also increases the likelihood of your finances being sabotaged.

At a click and swipe of your banking app you can transfer money from your savings account and into your everyday spending account.

Before banking apps and Internet banking, if you were in line at the shops and realised you didn’t have enough cash or money on your debit or savings card, you were forced to return unnecessary items. However, now the temptation to transfer money so you can buy these extra items is hard to resist when it’s so easy.

Online shopping

Gone are the days when shops were open 9am – 5pm Monday to Saturday, and closed Sunday. Now shops are open 24/7 online and you don’t need to leave your lounge room without putting a dent in your savings.

On top of convenience, Jessica Mai from Business Insider said there are multiple ways that online retailers get you to spend more - from remarketing to you the items you have ‘forgotten’, offering free shipping if you spend a certain amount of money and making the checkout process as easy as possible.

The new-age lay-by

Pay later technologies, such as AfterPay and zipPay, allow shoppers – both online and in-store - to purchase and take home their items without paying a cent upfront. As of March 2017, AfterPay had more than 500,000 active customers in Australia.

Using this technology, the total amount of your order is paid off over eight weeks in four fortnightly interest-free payments. Missing an instalment results in a $10 fee. If you fail to make the repayment within a week, another $7 fee will be charged.

Beauty blog ‘Popsugar’ wrote that after pay technology “will let you shop without spending any of your hard earned moolah . . . right now, that is. That can be future you's problem, obviously.”

But it’s ‘future you’ you should be thinking about, according to Financial Basics Foundation CEO Katrina Birch.

Katrina said with credit so readily available to young people, there’s a huge risk of carrying debt further into life.

“It’s buy now, pay later, it’s interest-free terms,” she said.

“There are so few barriers to spending, we’re opening up young people to the possibility of getting into quite difficult financial situations down the track.”

Without the opportunity to pay later you might not have bought the $200 dress or jacket.


Keep your finances on track

In order to keep you savings in tact, here’s four tips to keep in mind.

Cash is king

Ramit Sethi of blog ‘I Will Teach You To Be Rich’ urges people to use only cash for 15-30 days. When he took up the challenge, he reported saving 18% across two weeks.

Ramit said when you pay with cash; you’re forced to be a conscious spender.

“Rather than blindly using your credit card and deferring whether it’s worth it or not until your bill comes — by that time, it’s too late — using cash forces you to make that decision when you pay,” he said.

If you don’t want to go cold turkey from plastic, consider withdrawing cash to be spent on groceries and meals out. By knowing this is your budget, it will make you question whether you need that second block of chocolate or if you can afford brunch with a friend.

Create a deterrent

To help achieve your savings goals, some banks allow you to hide your savings account from the home page of the app or Internet banking site. This means every time you log in online you won’t see the amount available to you.

Make shopping online less convenient

It’s not a fool-proof method to stop online shopping, but by deleting the auto fill information you have stored in your browser or on our favourite online stores it makes it less convenient to online shop. Also un-follow online shopping stores on Facebook or Instagram so you’re not served up daily notifications of sales and new items.

Additionally, only buy if you have the money available upfront (and we don’t mean the money in your savings account). By saving for your $200 dress or jacket, you’ll re-learn the discipline of savings and the hard work it takes!

Review your direct debits

Review all of your monthly charges, from music and TV streaming to your gym membership and health insurance. Look at how often you use the service and evaluate whether you could cut it. If there are charges you can cut you could redirect that amount to your home deposit, mortgage or savings account.