4 Ways Technology Can Help You Avoid Debt

Even before the repercussions of the COVID-19 pandemic devastated the world of business and left so many companies and individuals in dire financial straits, debt was a problem ubiquitous in even the richest countries and societies. Whether it’s primarily driven by inadequate pay, irrational spending decisions, or issues finding adequate employment, it weighs heavily on households for years — and sometimes even decades.

There are basic precautions you can take, of course, with many being essentially what you’d expect to hear from a well-meaning parent: live within your means, save for a rainy day, buy instead of renting, don’t borrow what you don’t need, etc. That’s all perfectly sensible, but not always easy — and that’s where technology comes in.

Using technology can make it easier to avoid debt, and we’re going to take a look at four ways in particular that the wonders of the modern world can protect your finances. Let’s get to them:

It can track everything you spend

These days, most of us pay for everything digitally, whether through inserting credit/debit cards, using contactless payment through cards or smartphones, or just ordering online using the details or third-party payment services like PayPal. This is fantastic for convenience, but not so great for keeping track of how much we’re actually spending. Throw in the commonality of subscription-based services that can easily be forgotten about, and you have a recipe for debt.

Technology can help by making it easier for us to track everything we spend. This can be done on a personal level (a mobile app like BillGuard can not only track your spending but also sort it into various categories) or on an organizational level (fuel cards aren’t just for making spending easier: per iCompario, something like the Texaco fuel card can track the fuel spend of an entire fleet and automatically submit the resulting invoice).

It can automatically save for you

With cash, it was always relatively simple to save some, whether you had a piggy bank or some kind of safe to store it in. Saving with an electronic account hasn’t been so easy, because it’s essentially required people to either refrain from spending what’s there or find other accounts to move it to — but it can be easy through apps that save for you.

The standard idea is simple: every time you make a transaction, a set amount of money is transferred to a destination of your choosing. The Acorns app puts that additional money towards investment, while Chime just puts it into a savings account with very little interest but certainly enough stability to keep your money safe.

It can compare rates and offers

Whether you’re looking to make a purchase, or attempting to find and secure a loan to pay a vital bill, it’s important that you get the best possible deal. You can try to search manually, but it can take a long time, and you might not have that much time to spend (time is money, after all). That’s where the existence of comparison engines becomes so useful.

If you’re looking for something specific like a mortgage, an insurance policy, a utility deal, or a general-purpose loan, you can find a comparison engine to suit (Uswitch is a great example, helping people find better energy and gas deals). And when you’re trying to find a deal on a product, you can just search for one using phrases like “Best deals for [product name]”: there will inevitably be various roundups of suitable offers.

It can get you expert advice

You might not think of the internet as ‘technology’ because it’s such a fixture of modern life, but it absolutely counts as the biggest technological tool you can bring to bear when trying to avoid debt — not only because it provides you with access to the tools and comparison engines we’ve looked at so far, but also because it allows you to get advice from experts.

There are so many services and communities out there that help people save their money sensibly and get through tough times, spanning sites like Reddit and MyDebtEpiphany’s resource page. Keep visiting these sites, ask questions when you need to, and you’ll have a much easier time making savvy financial decisions. You can also make some good friends in the process — friends who can help you stay on the right path.

 

Technology can’t outright prevent you from getting into debt, obviously, just as a great dietary plan can’t stop you from disregarding it and eating whatever you like — but if you have the will to stick to a structure and follow best practices, you’ll have an excellent chance of minimizing your debt, even in circumstances as challenging as these.