Personal finance became a lot simpler over the last five years.
Today, I manage my finances, in less than an hour a month at no cost. I couldn’t imagine a world where investing wasn’t automated or expenses were not aggregated.
Is there room for improvement?
Of course. I believe we’re on the brink of even greater financial innovations. Innovations that benefit us even more. Innovations that take into account our irrational behavior and lead us to a better financial future.
Here’s my wish list of things I want to see…
- Dan Ariely’s “self-control credit card” actually exists. The idea behind the self-control credit card is that users select beforehand how much they’re willing to spend in each spending category. If they exceed that limit, they’re penalized by a method they choose. For example, you choose to spend $100 on clothing a month. If by chance you exceed that limit, your purchase may be rejected or you pay an automatic tax that’s donated to a charity of your choice. Even worse, an automated email gets sent to your wife or mom.
- If the self-control credit card existed, imagine then if your savings account was linked to your credit card and that any excess budget went into a sub-savings account nicknamed “clothes”. Therefore, say you only spent $60 on clothes this month. This will allow you to spend $140 next month, without a penalty. However, after a certain number of months, say 3, any amount leftover in your sub-savings account gets put towards long-term savings in your investment account.
- Mobile phone payment, as in scanning your mobile phone instead of swiping a credit card, is mainstream. I don’t want to carry a wallet in the future.
- More financial companies offer paperless billing as the default choice.
Basically, I want to see credit card companies, banks, and investment companies work together.
Maybe it’s wishful thinking, but I believe that by working together all can benefit. People who aren’t able to use credit cards now, due to little self-control, can now benefit. The banks would benefit from the excess savings being automatically transferred instead of spent. The investment companies benefit because more people are investing a larger amount of money.
In many cases, the bank, credit card company, and the investment company are the same company. So it’s not too wishful thinking, after all.
In the comments, would love to hear your thoughts on the future of personal finance. What would you love to see changed?
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