The following is a guest post from Earnest, a technology company that uses cutting-edge data science, smarter design and software automation to rebuild financial services. Earnest understands every applicant’s full financial story to offer the lowest possible rates and radically flexible loan options for living life.
Salad instead of fries. Green tea instead of coffee. Debit instead of credit.
We’re all trying to make healthier decisions so we can live longer and with more ease. Your money is no different — making good financial choices is also part of living a happier, better life.
Like eating, the earlier you start, the longer can you enjoy the rewards. But what you might not know is how a new generation of technology can help.
Nearly all of our everyday financial choices — like saving, spending, borrowing, insuring — have become more efficient in recent years with the help of better, more sophisticated software. For you, that means you can use technology to save time and money through better automation, personalization, and efficiency.
Let’s take a look at some of the ways you can make better financial choices with the help of these new tech-based services.
Better financial choice #1: Stop paying so much interest on your student loans.
For 40 million Americans, student loans are a fact of life — and there are ways to make living with debt better, such as refinancing into better rates. By refinancing student loans, you can reduce your monthly payments or reconfigure the terms of your loans so it fits better with your monthly budget.
You might try: Earnest offers hyper-personalized loans with its Precision Pricing feature. This feature provides you with an interest rate that matches your exact budget so you’re not overpaying in interest.
Better financial choice #2: Automate all your investing goals, large and small.
Investing is not new but using technology (in lieu of a financial advisor or your own time) to manage your investments is a recent thing. Automated investment services, aka robo-advisors, provide online tools to help you customize sophisticated investment portfolios with the right mix of stocks and bonds, and then keep your investments balanced and performing as they should.
You might try: Betterment lets you create multiple investment goals and customize each one for the right mix of stocks and bonds, and has some of the lowest fees in the industry. It also allows you to connect your outside accounts to get a 360-view of your savings and retirement plan.
Better financial choice #3: Only pay insurance for the miles you drive.
New technology helps you match the number of miles you drive with what you actually pay for insurance — especially useful for people who only drive occasionally. With traditional insurance, you might pay $100 a month, no matter how many miles you log. Now tech-based insurance mean you pay only what you use — slashing that $100 bill down to $37 per month, for example.
You might try: With Metromile, you plug a tracker into your vehicle to log the number of miles you drive — and that is the basis for what you pay. The added benefit of the tracker is you can also log you all the trips you’ve taken and see where you’re parked at all times.
Better financial choice #4: No cash, no problem. Share bills digitally.
While cash is not yet dead yet, it is on a slow decline. One reason is that new peer-to-peer payment technology allows you to swap money as easily and instantly (almost) as cash. These services aren’t just for splitting the dinner bill, but are increasingly used to pay rent and for other services.
You might try: Venmo is an app where you can you exchange payments with friends and leave a note about what the funds were exchanged for, and with no fee. Many banks and PayPal also have payment platforms that allow you to transfer money to others without an extra charge.
Better financial choice #5: Invest your loose change, automatically.
You know how a giant jar of loose change can add up to a surprisingly large amount by the end the year? You can apply that same principle — small daily savings that you don’t notice — to your bank account and spending.
You might try: By connecting Acorns with your bank account, you set it to round up any purchases, for example, and then invest the difference. For example, if you spend $12.47 on lunch with your debit card, your Acorns account can grab the remaining 53 cents and invest it. It’s not free, but it’s a way to make saving as seamless as possible.