With the issue of consumer debt comes the notable differences in attitude between generations. Generation X and the Baby Boomers are amongst some of the most likely to have savings and a clear plan for the future due to their influences as young adults. For millennials and the upcoming Gen Z age groups, this has clearly been a different path. Research shows that many 18-24 years old worry about debt and have no savings or plans in place for future financial security. From 25-35 years, the concern of buying a home, managing debt and planning for retirement are also significant factors in this generational divide.
To assist and tackle the above problems and the rise in consumer debt in the UK, there has been a new wave of start-ups acting as a spending advisor. Research indicates that young people are more likely to use technology to help monitor their cash and are open to new advances in digital and mobile apps to improve their financial future. Digital tools provide a clearer view of every aspect of an individual’s financial situation and can help people to take back control of their spending habits.
Check out some of the ways innovation is helping tackle this growing problem.
AI that manages spending and debt
Those who cannot manage their money correctly will find that it rapidly becomes challenging to keep a healthy bank balance and also an organised financial life. Banks and institutions are increasingly introducing mobile technology and financial management tools to help people stay on track, and manage both spending and debt.
>See also: How does debt consolidation work?
Many of these tools have a primary focus as a budgeting aid, which allows space and facilities to create a plan of what you will spend, and when you will spend it. By utilising the same security system as banks, it also allows for the collection of credit card and debit card information. This means that you have a place where all the information regarding your finances is available for easy viewing.
Other applications track your spending, and also keeps an eye on your credit score; they can also notify you if there’s something that will negatively impact the credit score. Many of these apps have an emphasis on security too, as they’ll notify you if there are any suspicious changes to the account and also if there’s any data breach.
Advanced systems for effective debt management
The need for digital tools has been recognised by the finance industry including the debt consolidation sector. If consumers need a helping hand with managing their debt, these systems provide a tailored solution for the fastest outcome. Organisations that handle services such as a Scottish Trust Deed are able to efficiently bring everything together to help you manage creditors without a lengthy and manual process for the client. Using online tools such as eligibility calculators and personalised agreements is assisting consumers to tackle niggling worries in a controlled way, which also helps to reduce the impact on living standards.
Accessibility and increased security
FinTech is bringing money and debt management to a generation that rarely ventures into the high street to do traditional banking. This is not only vital for managing money; it is essential for those that have reduced accessibility to conventional finance solutions due to locality and disability. Security is another huge factor in the trust people place on technology for managing their money. FinTech has introduced some of the most sophisticated systems and security protocols to ensure privacy and safeguarding of information at all times.
>See also: The churn of the digital consumer
Both of these aspects of banking and financial management build the relationship between institutes and consumers, which enables a smooth process and ultimately full insight to assist in creating improved relationships with money management.
The bottom line
Sometimes, we need something that will hold us accountable for the choices we make regarding money. It’s not always easy to keep track of what we spend, where we spend it, and how often we spend, so digital technology is paving the way for more visibility and tighter controls to help encourage a healthier outlook on managing personal finances.