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How Finances Have Changed Over 20 Years

How Finances Have Changed Over 20 Years

People like to joke about “when I was your age,” but the fact remains that the cool, rebellious grunge kids of Generation X have grown up into the responsible 30 and 40-somethings of today. They will be the last generation to handle finances in the old pen-and-paper way, and while these changes have unfolded gradually over some years, it’s sometimes jarring to think about how money was handled “when I was your age.” Consider the way these things have significantly changed:

Paying Bills

20 Years Ago: That checkbook that you keep shoved in a drawer? 20 years ago, that checkbook was your lifeline; you needed it to pay and mail every bill, making record keeping utterly important, as well as a large supply of stamps to send all those payments in.

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Today: How do you want to pay your bills? Today, the choice is up to you. You can use the old way of sending a check. You can keep a credit card on file for automatic payment. You can send your bank or credit union account and routing numbers to your online account for payment. You can also use various services such as PayPal or your financial institution’s billpay system. Digital banking is all about flexibility.

Keeping Records

20 Years Ago: Checkbooks weren’t just used for writing checks. Two decades ago, the checkbook was also the place you kept all your records. The phrase “balancing my checkbook” meant actually compiling all of the deposits and debits to see if the numbers made sense, and if they matched up with your monthly statement. It was the manual way to make sure you didn’t overdraft or get things out of place with your finances. Records of your checks were either written as line-items on your checkbook’s ledger or with carbon copies of each check, or even both.

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Today: Financial institutions have a secure online portal now that allows instant access to real-time records and a scanned archive of your deposited checks. Records may even be accessible on your smartphone, as many banks now have apps for financial management.

Getting Paid

20 Years Ago: Direct deposit was in its infancy, and for many people, you still got a physical check every two weeks. Depending on where you worked, your check was either mailed to you, or distributed at your office; that usually meant a trip to the branch rather than simply knowing it was electronically transmitted (an entire episode of the cult 1990s show The X-Files used rushing to the bank as the basis of its plot), and if you lost the physical check, it could take time to receive a replacement.

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Today: Wherever you work, you simply fill out a form with your information (account and routing number) and your paycheck magically appears in your account upon payment. This saves loads of time and effort since you don’t have to go to the branch, though it’s still worth it to regularly check and make sure there’s nothing funny going on with your deposits. Many institutions now allow for check scanning via a smartphone app as a means of deposit as well.

The Little Things

20 Years Ago: Cash was a common thing. In your wallet, on the entryway’s side table, change in your pocket – all of these places would be sensible ideas for keeping coins and a buck or two. Simply put, you never knew when you were going to need it. At the same time, you’d still have to be on guard with it because unlike digital transactions, cash could be stolen. Cash was the go-to for so many things, from simply paying for items at the store, to leaving a tip for service. If you didn’t have enough with you, tough beans, you weren’t buying it that day.

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Today: Modern finances make cash practically obsolete, though there’s certainly something practical in keeping some around. You can pay entirely by credit card, including tip, at most places. You can split the tab with friends using apps, you can pay bridge tolls through electronic sensors, and many vending machines and parking meters take cards, at least in major metro areas.

What’s Stayed the Same

The way we pay and make records of our finances has changed wildly in the digital age, but one thing remains constant: you need to be smart about how you handle your finances. In fact, it’s probably easier to give into spending temptation when everything fits on a card or you don’t have tangible cash to use (there’s been a study on this). You still need to manage your accounts, you still need to look at sound ways of investing, and you still should consider things like credit unions as a means of financing with better interest rates. These notions existed 20 years ago, and they’ll continue to exist 20 years in the future, despite however technology evolves the means of transaction.

Featured photo credit: jarmoluk via pixabay.com

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Bill Prichard

Senior Manager, Corporate Communications at CO-OP Financial Services

How Finances Have Changed Over 20 Years

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

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