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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 October 8, 2018

13 Incredibly Useful Tactics to Help You to Stick to Your Family Budget

13 Incredibly Useful Tactics to Help You to Stick to Your Family Budget

Are you having trouble sticking to a family budget? You aren’t alone.

Budgeting is difficult. Creating one is hard enough, but actually sticking to it is a whole other issue. Things come up. Desires and cravings happen. And the next thing you know, budgets break.

So how can you stick to a family budget? Here are 13 tips to make it easier.

1. Choose a major category each month to attack

As the saying goes, “Rome wasn’t built in a day.” With that in mind, one approach to help you get into the habit of sticking to a budget is simply starting slow.

Spend too much on Starbucks runs, eat out too often, and have an out-of-this-world grocery bill? Choose one bad habit and attack.

By choosing one behavior to focus on, you’ll prevent yourself from being overwhelmed. You’ll also experience small victories, which help you gain positive momentum. This momentum can then carry over into your overall budget.

2. Only make major purchases in the morning

If you’re making large purchases in the evening, there’s a good chance you’re doing so after a long day and you’re probably tired.

Why does this matter? Because our judgement tends to be off when tired – our willpower is compromised.

Instead, only make major purchasing decisions in the morning when you’re energized and refreshed. Your brain will be firing on all cylinders and your resolve will be high. You’re less likely to give in and settle at this point.

3. Don’t go to the grocery store hungry

Have trouble with impulse buys at the grocery store? If so, there’s a good chance you’re going grocery shopping while hungry.

The problem here is that when you’re hungry, everything looks good. So you’re more likely to make split decisions on things that aren’t on your grocery list.

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Instead, make sure you eat prior to your grocery store trip. Then take your list, along with your full stomach, and go shopping. Notice how food doesn’t look quite so good when you’re not fighting cravings.

4. Read one-star reviews for products

Is there a product you just have to have (but maybe not really)? Check out the one-star reviews.

By reading all the horrible reviews, you may be able to basically trick yourself into deciding that the product isn’t worth your time and money.

Next thing you know, you didn’t make the purchase, you saved the money, and you feel good about the decision.

5. Never buy anything you put in an online shopping cart until the next day

If you are making a purchase online, it’s typically a two-step process. First, you click “Add to Cart” and then you go in to review your cart and pay.

The problem is that there not typically much reviewing during step two. It’s generally click pay and there you go. However, this is the perfect point to stop for reflection.

Once you add to your cart, your best bet is to step away until the next day. Let the item sit there and grow cold, so to speak.

This gives you a night to “sleep on it” and decide if you really want and need to spend that money. If you wake up the next day and still find the purchase viable, then perhaps it’s time to go for it.

6. Don’t save your credit card info on any site you shop on

One of the other pitfalls of shopping online is that fact that most sites ask you to save your credit card information.

While the sites will frame it as a method of convenience, the truth is they know you’ll spend more money in the long run if your credit card information is saved.

The “convenience” takes away one last decision-making point in the purchasing process. True, it’s a pain to get out your credit card and enter the information every time. But guess what? That’s the point. If that inconvenience helps you stay on budget, then it’s worth it. Which leads into the next tip.

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7. Tape an “impulse buy” reminder to your credit card

Credit cards make spending much easier than cash. When you spend cash, you can literally see your wallet emptying. A credit card comes out, then goes back in. No harm, no foul.

That’s why it’s a good idea to tape a reminder to your credit card. Customize a message that is something along the lines of “do you really need this?” or “does it fit the budget?”

That way when you pull out the card, you get one last reminder to help you question your decision and stick to your budget.

8. Only use gift cards to shop on Amazon

Amazon is probably the easiest place online to blow money. It’s just so easy to click and buy. However, one way you can slow the process down is buy only using gift cards. Here’s how it works.

If you plan on making a purchase on Amazon, go to the grocery store and purchase a pre-loaded Amazon gift card of the proper amount. There’s no convenience fee, so you literally pay for the money you’ll spend.

Now take that gift card home and load it to your Amazon account. There’s your money to spend.

Why does this help? It makes you have to purposely go to the score and purchase the card in order to purchase the item. That’s a pretty deliberate thing that takes some time, commitment, and thought.

This process will effectively kill the impulse buy.

9. Budget using cash and envelopes

As mentioned earlier, it’s a lot harder to spend cash than swipe a credit card. You can take this even farther by using only cash, and separating that cash by budget category.

Create an envelope for each category and stick the cash in there at the beginning of each month. When the envelope is empty, no more spending on that category, unless you borrow from another (be careful of that approach).

This can be pretty helpful for people that have a hard time following transactions in their checking account, or keeping a budgeting spreadsheet.

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The envelopes simplify the tracking process, leaving no room for error. Nothing hides from you because it’s tangible in the envelopes in front of you.

10. Join a like-minded group

Making the decision to stick to something like budgeting is difficult. It takes long-term commitment.

You’re going to feel weak sometimes. And sometimes you may fail. That said, support from others can help strengthen resolve.

Support can come from a spouse or a friend, but they won’t always have the exact same goal in mind. That’s why it’s a good idea to join a support group that’s likeminded.

No need to pay here, as there are tons of free communities that fit the bill online.

For example, reddit has multiple subreddits that deal with budgeting and frugal living. You can follow, subscribe, and get active in those communities.

This will open your eyes to new tips and strategies, keep your goal fresh on your mind, and help you realize there are others dealing with the same struggles and being successful.

11. Reward Yourself

When you set a budget, it’s usually with a large goal in mind. Maybe you want to be debt free, or perhaps you want to see $10,000 in your savings account.

Whatever the case, the end goal is great, but the end is often far away, making it hard to see the end of the tunnel.

With that in mind, it’s a good idea to set mini-goals along the way. This helps you still look at the big picture but have something that’s attainable in the short-term to help with momentum.

But don’t stop there – set rewards for yourself when you reach that small goal. Maybe it’s an extra meal out. Or a new pair of shoes.

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Whatever the case, this gives you something in the near future to look forward to, which can help with the fatigue that can result in pursuing long-term goals.

12. Take the Buddhist approach

You don’t have to be a Buddhist to recognize some of the wisdom in the teachings. One of the tenets of the philosophy involves accepting that we can’t have everything we want. And that’s okay.

Sometimes you won’t feel good. Sometimes you’ll have cravings. You can’t deny them. But you can recognize them, accept them, and let them pass by. Then you move on.

Apply this to the times you want to do things that will break your budget. You’re going to have the desire to eat out when you shouldn’t. You might want to stay out and spend too much at happy hour with your work friends.

The feelings will come. Recognize them, accept them, but let them go.

13. Set up automatic drafts to savings

If you wait until you’ve spent all your budgeted money to deposit money into savings, guess what? You probably aren’t going to put any money into savings.

It’s too easy to see that as extra money and end up using it to treat yourself.

Instead, set up automatic savings withdrawals. That way, the money is marked and gone before you can even think about it. It becomes a non-issue. It’s no longer “extra.” It’s just savings.

Conclusion

Sticking to a budget can be difficult. No one is denying that.

However, if you can do a few things to set yourself up for success, and put some practices in place to curb impulse buys, then you can (and will!) be successful sticking to your family budget.

Featured photo credit: rawpixel via unsplash.com

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