There is no denying that digital devices make our lives easier. But, according to new research, they have also made spending money easier too!
Shlomo Benartzi is a UCLA behavioral economist who wrote a book called The Smarter Screen, which takes a closer look at the influence of mobile devices on buying behavior. His research shows that our brains operate differently when we are using screens versus pen and paper.
“One possible reason is that you might think and act faster in front of screens, which leads to a greater reliance on instinctive responses that are often incorrect,” he told Money magazine.
This is in addition to the research that shows we spend more with plastic than we do with cash – anywhere from 12% to 18% more!
Certain apps help you spend less
However, it’s how you use your phone that counts. Some behavior on our phones can help us to save money, instead of spending it.
Benartzi and USC assistant professor Yaron Levi studied people’s spending behavior while they used a financial mobile app. This app tracked spending and showed how spending affected the user’s budget and future net worth. In doing so, they found that participants decreased their monthly expenditures by nearly 16%! This shows that relevant information at the point of purchase is very helpful and can encourage us to save money instead of spending it.
Read more: 9 places you should never use a debit card
Steps to keep spending at bay
Since it is so easy these days to make impulse purchases and transfer money via a mobile device, you might want to set up a series of checks and balances for yourself to keep unnecessary spending and poor financial management in check.
If you’re an impulse shopper or if you have specific financial goals, this might mean deleting credit cards from online shopping sites you frequent, or at least disconnecting the 1-click checkout settings. (Amazon allows you to turn the 1-click checkout feature on and off according to your preferences.)
It also might mean making a mental note to check your balances before purchasing anything, deleting shopping apps from your phone or buying items in store or on a desktop computer instead of by mobile device.
In addition, make sure your phone has tools that encourage you to save money versus spend it.
In need of some money saving apps? Check out some of our recommendations below!
- Mint – Manage your budget with easy to use personal finance tools and calculators. Track spending and monitor your online banking account.
- Mint Bills (formerly Check) – Proactively stays on top of your bills and monitors your bank accounts and credit cards, all in one place.
- MoneyStrands – Track your spending, get a real-time overview of your finances, and plan ahead.
- The Clark Howard Show – Free advice to save more, spend less and avoid ripoffs — right at your fingertips!
Read more: Managing your money the old-fashioned way