So the last few weeks, I have been in said semi-undisclosed country for work and now, I am back in the U.K. Funny thing that happened, I forgot my PIN number for my debit card in said country, so I wasn’t able to take out any cash other than on my UK credit card, which made me a bit more nervous about using it. Also, then I returned here to the U.K. only to realise that now, I don’t remember my PIN number here! Uh oh! So, I’m going to use this situation with locked debit cards to tell you what I do and do not like about frugalness and cash and to ask for your opinion about some new overdraft and savings tools out there in Fintech land.
First, the good things about cash: It lets you put a given amount into your wallet and then you can say okay, this is what I get to spend, and then when there is no more spending, there is no more spending (because there is physically no more cash). I also get to try to be the annoying (semi) old lady that has to dig through the change purse to pay for the 15,67 euro grocery bill. But of course I have the 0,67 cents! (Yes, I am using the comma for a period, good catch!) Second, it’s easier to distribute “fairly.” My spouse and I do not use the cash envelope method but I can imagine that the 100 pounds in free money each a week to do what we want seems fair. My bet is that it would also be gone by mid-week and then we would be sad and use the debit cards anyways but I dunno. Maybe you have better experience with this?
Okay now the not so good thing about cash: its untraceable (non-transparent) unless you keep receipts and I hate having a wallet full of receipts and I never go through the receipts and add them into our budget book. They just end up with the miscellaneous ATM withdraw note “CASH” which I find on the bank statement. Also, I overtip in cash. You should see whether you do this too. If given a breakfast out, I am much more likely to tip more with cash than I am with my debit card. Anyone else find this?
Finally, and now I am going to talk about Fintech and apps that use your transaction information for disrupting your spending habits and prompt you to save more. I recently read about a startup, which I am not going to mention by name because they request your internet banking info, which seems dodgy, but anyways, the startup is basically gathering information about your spending habits and using it to then make (small) savings deposits for you based on your week into a certain bank (which I am sure is backing said startup). So this is kinda like the Sabbath round up from my blog post but a bit more “smarter” because it goes through trends in your spending and figures out where you have a surplus and automatically squirrels it away in your account. The whole point is that its so small and so smart (i.e. well timed) that you don’t notice that you are doing it.
So the reason that I’m not going to mention this particular company is that how this company works is by taking your online bank details and moving this “extra surplus” around for you into another bank account. So they basically have your bank details and they make the deposit for you in their preferred bank. You guys seem like you like controlling your money. Furthermore, in the semi-disclosed country, this would never work because it seems very unlikely that people will give up this online bank account information. So let me ask you, do you want such a service to be stand alone, that you can do it (and tweak it) yourself? Integrated as a service inside your actual bank? Done by someone else (i.e. an app)? What are your thoughts on smart savings?