Lab 021 - New Bank Account, Who Dis?
About the episode
Happy New Year!!! 2019 flew by and 2020 is here. With the new year come resolutions. Folks are getting gym memberships, eating healthier, and trying to get better with managing their money. So in this lab we are diving into the huge industry of fintech (financial technology) to figure out how to save in 2020 by using these apps and services, while not falling victim to some of their schemes.
FinTech
There are a lot of different types of fintech but we focused on personal finance, point of sale/shopping, and consumer lending.
Personal Finance fintech apps are Mint, credit karma, or even your personal banking app. These apps are awesome for keeping track of your spending and monitoring your saving goals. They are constantly pulling data from your account to help. They use a technique called gamification to further incentivize by letting you accrue points or stars. They want to make you feel good while you save your money!
Point of sale fintech apps are Venmo, PayPal, apple pay, CashApp, Square, Zelle, etc. and for some of us these are the wave of the future. They eliminate the need to carry cash or card, eliminate some of the fees that merchants had to pay for card transactions, and it makes it easier for folks purchasing because we will no longer have to have a minimum amount purchased. The down side to this is that it makes it REALLY easy to spend money.
Consumer lending fintech aren’t always apps but they are a service that allows you to make a purchase and pay it off in installments, almost like a loan. One issue is that companies are using alternative risk scoring to determine a person’s credit worthiness. This means that in a company’s proprietary algorithm they may use things like your internet browsing history to determine your creditworthiness!
At the end of the episode Dr. Maurer gave some sage advice for all the folks trying to save this year:
Make reasonable goals - strive for something attainable or you may just give up
Focus on your debts - don’t start investing until you have paid down your debts.
Use the 50,30,20 rule - This is something that was proposed by Senator Elizabeth Warren. Allow yourself 50 percent of your paycheck on your actual needs. That’s you're your rent, your mortgage, your food, medicine, stuff, that kind of thing. And then they say 30 percent on your wants, on your desires. 20 percent to your savings and or paying off your debts.
About the expert
For this episode we called in Dr. Bill Maurer. Dr. Maurer is an anthropology professor at the University of California at Irvine, where I director research center called the Institute for Money, Technology and Financial Inclusion.
Let us know below some tactics you are using to save money in 2020! Or if saving is not one of your resolutions let us know what is!
Transcript
Check out this episode’s transcript here!