How is technology changing the way people approach personal finance?

By Jessica Dosseh

Technology may make it easier to see where you stand financially. It removes the need for us to micromanage the tedious task of accounting for every penny we earn and spend. It gives us the time to focus on what we do best. Technology partially gives us time to overthink the bigger picture and question the systems and subtle differences that affect our lives. On the other hand, technology makes it a lot easier to design systems that reinforce detrimental habits.

So, if we want to look at how technology is changing our finances, we have to first look at how technology is changing our behavior.

Human behavior is based on the ability to understand and respond to internal and external factors that affect our mental, physical, and social surroundings throughout our lives.

As we develop as individuals, it is safe to assume that we know ourselves better than anyone else. However, the development of technology has taken understanding each person's behavior a step further simply through data collection and prediction.

Computers can actively guess what you are going to do before you even do it, and a lot of the time, that is literally what "algorithms" are designed to do. So with this understanding coupled with our own predisposed biases and emotions, technology can easily shift between helping us thrive financially or leading us down a path to financial instability.

Birds of a feather tend to stick together. Technology has created waves of social and economic connectedness that, in turn, give people the opportunity to build wider networks. This exposure affects our financial decision-making through a broader network of potential social influences shaping our attitude towards money. Because of this, it is important to take the time to question whether or not these influences are positive or negative. The vast amount of information at our disposal may help us make more informed financial decisions; however, take note of the information you tend to gravitate toward and whether or not it's an echo chamber that prevents you from acknowledging other forms of information.

For better or worse, technology has played a significant role in changing the way we interact with each other by making information that would otherwise have gone undiscovered accessible. However, this accessibility to information is not enough on its own to increase financial gain, understanding, or opportunity.

As technology gives us more control over our financial lives, it also changes the way we value, perceive, and interact with money.

This article is meant to help you question your financial behavior and equip you with a way to get started. The first step is always the hardest, so why not start with understanding your own awareness?

Here are some reflection questions:

• What does financial literacy really mean to you?

• What do you know about money?

• How has the stigmatization of money affected your overall understanding?

• How does it affect your emotions and your actions?

• Are you exposed to the right type of information that would help you reach your personal goals?

• Are the tools you are using helping you get better at saving, investing, or spending?

• How has your social network positively or negatively affected your economic connectedness and understanding of your financial well-being?

Now that you have thought about some of these questions, where does your financial perspective stand? Do you know the type of help you need to reach your financial goals?

We would love to hear from you and start a discussion, so feel free to share some of your responses with us at "[email protected]"

If you have read this far, you may be on the right track to understanding how technology affects you as an individual and how you can better use all the tools available at your disposal to help you reach your financial goals.

Please take a moment to read through some of our more in-depth articles for more specific information.