In today’s world, everything is about convenience which is contributed to by automation. The easier something is to do the more convenient it is. This is the way that some people feel about banking and its offspring of going paperless. While a lot of people have adopted the use of the internet for looking after their banking needs there are still many that have not. So is it a good idea or not? It isn’t just restricted to banking basics either as there are options for automating other areas of your finances like paying your bills.
What Can You Do With Online Banking?
You can do just about anything that you would have had to in the past if you were to go to your bank. Some people only have to do minimal banking. While others do a lot. Whether people like it or not they are being forced into automating these services. Tasks such as the following can easily be done online.
*Deposits
*Money transfers
*Bill paying
*Automation of records
*Banking from any location
Although most banks still maintain their brick and mortar institutions there are a lot of online-only or virtual banks that are popping up.
As with anything, there are pros and cons that come with automating your finances.
The Benefits
When circumstances arise that you are not able to get to your banking institution being able to do it online is a real benefit. A prime example of this is what happened during the pandemic. Many people were nervous about going to their banks for fear of contracting the virus. Others didn’t want the hassle of having to deal with social distancing. Aside from that, there are just some days when it is inconvenient to go out.
Money Transfers
The days of having to send someone a check as a gift for example is long gone. Now with just a few clicks with online banking money can be transferred to an individual’s account and they get access to the money immediately.
Bill Paying
This is perhaps one of the greatest benefits. There is no having to write checks and mailing them to pay your bills. You can either pay them online each month yourself, or you can set it up for auto payments. This means the company will just automatically take out the amount due from your bank account each month. The added benefit to this is it means you are paying your bills on time which is good for your credit score.
Betting Savings
When you can see all your banking information at a glance it may entice you to build your savings. When you log into your bank account and see some extra money sitting there you can easily transfer it over to your savings account. If you make a habit of doing this you will soon find that the savings account is beginning to grow. You are less likely to spend the extra money because its not sitting in your checking account.
The Downside
There are some negative aspects to automating your finances. But, if you know what these are you can avoid them.
Safety and Security
For this time of automation, one of the risks you are facing is keeping your personal information secure. The financial institutions mostly have some very tight security features on their end. It’s your end that you have to be concerned about. Making sure that you have good protection of the devices you are using to access your bank. This is one of the reasons why it is suggested not to use free wi-fi when you are away to do your banking. There are plenty of programs that are reasonably priced to protect your devices from becoming hacked.
Extra Costs
There are costs that come with online banking services. Otherwise, the bank wouldn’t be making any money off of you. Most of these are comparable to the costs you would incur with if you were utilizing standard banking services. However, what you do have to watch for is those automatic payments that you set up. If you don’t keep enough money in the bank to cover them then you will end up with NSF charges which can be pretty hefty. Not to mention that the missed payments are going to affect your credit score.
Impulse Buying
Using online banking means you will be able to use your bank card for purchases either online or when out shopping. This is super convenient and you could end up buying items that you don’t need.
Over Spending
Another risk is that with this type of virtual service you can transfer money back and forth between your checking and savings account. This makes it too easy to spend money in your savings account that you don’t want to touch.
Is Automating Your Finance A Wise Choice For You?
You have to look at your personal situation. For some this way of banking is far better for them. For individuals who cannot get to their bank easily, it is a great option. For those who find it too convenient to spend money this way then it may not be their best choice.
Keeping Track
Having a hard copy of your bank statements is something that most people found beneficial in the past. Having access to them online is easier. However, the banking system you are using may only keep your records accessible to you in this format for a short period of time. What you should do is copy your statements to a file and keep these on your computer. Or if you really want to you can print a hard copy.
There are some decisions to be made when it comes to automating your finances and you should think these through carefully before making your final decision.
Another form of automation that requires a lot of decision making is when it comes to your taxes. The CRA is strongly encouraging everyone to go this route. Many are finding this confusing. If you are in need of any assistance with your tax filing or completing your taxes please give me a call at 416-398-1700.
