The Dark Side Of Convenience

The Advertiser article; Saturday 6th of June 2020:

Money spent by Australians on “Buy Now-Pay Later” has doubled during the COVID-19 lockdown, plunging consumers deeper into debt.  As people reach out for financial help, transaction data obtained by The Advertiser from 7000 bank accounts linked to comparison site Finder’s mobile app has revealed more than $1.19 million was spent with providers like AfterPay and ZipPay in May.

Pardon?

Did you catch that?

Just how much information are we giving away?  Whether it be knowingly or unknowingly, the apps and technology we have on our “smart devices” are giving away more information about us than ever before.  Not only that, we are spending more money that we don’t have by using services such as Buy Now-Pay Later which encourage us to spend; regardless if we have money to repay the debt or not.

Money has become smarter, maybe even smarter than us!  Even some banks like Westpac encourage us to “wear our money,” and have fashionable accessories allowing us to do so.  What people don’t realise is that this is just “tap and go” in disguise, allowing your bank to monitor when and where you are spending your money.

AfterPay is seen as the “trendy” alternative, and so easy for shop assistants (not sales people) to say to you, “just AfterPay it,” it’s so easy.  It’s fashionable, it’s trendy and is seen as “the thing to be doing or you will be left out.”  If I had a dollar for everytime I was asked if I wanted to use AfterPay, I would be a millionaire I am sure.  I don’t know about you, but I am just not sure what all the fuss is about with all this “trendy stuff.”  AfterPay is just another example of consumers having their spending tracked.

When did money become so difficult to get a hold of?  You know, that plastic shiny stuff…. Red, blue, orange, yellow, and green… I’m not talking about the Mighty Morphin Power Rangers, I am talking about money.  The stuff that you could fold in half and put in your wallet.  Money that used to mean something, something that had purpose, something that allowed us to live our life in financial control and not be monitored by big-brother.  With the convenience of modern, trendy ways to pay; money, our hard-earned cash, foldable, valuable and beautiful… is now seen as yucky, sticky, icky and dirty.

Really?

We are living in a time where we pay all our bills online, make sure we have all our bank accounts setup and ready to tackle any future bills coming in.  Technology is king and savvy and has allowed us to better manage our lives and make it much easier for us to manage our money that we are now far more in control of our financial future then we have ever been before.  If so, then why is the opposite true?

From March to May 2020, the National Debt Helpline received more than 40,000 calls for advice.  Just short of 5000 calls were from South Australia alone.  On an individual level, 37 per cent are struggling to pay off their own debts, with almost half of millennials reporting that debt is a problem for them personally.

Why?  We are smarter than this aren’t we?  

Maybe the problem is not intelligence, but ignorance?

Maybe it’s because debt is keeping us all under control.

Maybe it’s because we don’t have a system that allows us to accurately predict our costs going forward…

Whilst it may seem convenient to use these services, the opposite is quite often true.  We would argue, strongly, that an overextension of buy now-pay later products that help consumers to get into a spiral of debt that they cannot afford to repay is not convenient.  Tap and Go, whilst spending your own money on a debit card, can also have its limitations in terms of every single transaction you make being recorded and being used against you when you apply for future credit.

Consider this if you are keen on applying for the $25k Homebuilder grant recently announced by the government.  Your accounts, your spending, your savings will all be forensically reviewed prior to you obtaining finance.  With the advancement of smart technologies above, how would your file read to a lender?  Risky or a great client?  It all depends on your activity, your actions and what you choose to do when you “tap” your payments.

Consider this when you ask for the best rate from your lender only to realise that the best rate is not your rate due to your credit score and spending history.

Want the best deal?  We can help.

Want to have your finance approved?  We can help.

Your life does not need to be like this.  If you want to learn how to accurately predict your costs going forward, and be borrower ready, an ideal candidate for any lender, then get in touch today!

Source: Westpac – https://www.westpac.com.au/personal-banking/mobile-wallets/paywear/

For more information or to arrange an appointment please contact us:

Andrew and Alyssa Mates on 0420 846 454

or via email at:

“An effective budget is knowing which numbers belong where; and what the values of these numbers are to make the magic in your life happen…”

ABOUT THE AUTHOR

ANDREW MATES is the director, money coach and operator of Adelaide Budgeting and has always had a keen interest in numbers and the philosophy of succeeding financially in a world full of consumerism.  Andrew is a valued member of the team and is passionate about education and empowerment around finance and providing people with the confidence to successfully manage their own finances.  Equipped with a Diploma in Finance and Mortgage Broking (but not a broker), Andrew and his team can work with you to create a budget plan and savings strategy that is second to none which will see you kicking goals and doing the things you want to do but never thought you could!

In between helping clients and working on strategies, Andrew also enjoys walking on the beach, playing with Lilly his Labrador and road trips with his wife Alyssa.