A digital wallet isn’t just a great place to store your debit and credit cards. It can help you manage your money better too.
Did you know that a digital or mobile wallet can help you get better control over your money? In this article, we’ll explore 6 ways you can improve your money management using the features of a digital wallet.
What is a digital wallet?
Like a physical wallet, a digital wallet stores all your important financial information, such as debit and credit cards, loyalty cards, vouchers, gift cards and even e-tickets for events and travel. However, a digital wallet has one big advantage over a physical one – it gives you access to the details of your bank and credit card accounts on the go. This means you can get better control over your finances, avoid overspending and more easily reach your savings target.
Using a Digital Wallet to Manage Your Spending
Here are six things you can do with a digital wallet to help manage your spending.
1. Set a savings goal.
Saving money can be challenging but it’s a good idea to have around three to zix months’ worth of your living expenses as a rainy-day fund in case you lose your job or have unforeseen expenses. Some digital wallet apps will enable users to create a savings goal and make it easier for you to hit savings targets by implementing roundup and automatic deposit functions. Research by Commonwealth, a nonprofit supporting financially vulnerable people shows that this feature is likely to be very popular with users who have low to moderate incomes.
2. Set a budget for each category of spending.
Having an overall spending budget per month is good, but breaking that budget down by each major spend category is even better. Creating different spend buckets makes you think harder about your expenses, meaning you are less likely to overspend. If your expense tracking shows an overspend in one category, you can consciously choose to offset this by making savings in another area.
3. Create new categories to track spending in more detail.
When you measure something, you can affect it. This scientific principle applies to all areas of our lives. By tracking your spend against a budget, you will gain a better understanding of where you are spending unnecessarily and where you can start to make changes that make a difference. Your digital wallet is much more than simply a storage area for your digital cards because the added features mean you can drill into your transactions and learn about your spending habits. And when you know what you are currently doing, it’s much easier to adjust, change your habits, and improve your situation.
4. Set a reminder when you are close to your budget.
Another helpful feature of some digital wallets is the option to set an alert that tells you when your spending has reached a certain percentage of your budget for the month. This helps you to avoid overspending. If you are receiving your alert earlier in the budgeted month or year than expected, then you know you need to quickly rein in your spending to stay within your budget.
5. Set a reminder when bills are due for payment.
Life is busy and it’s easy to forget tasks on your to-do list, so why not have your digital wallet remind you when payments are due? Some wallets allow you to set reminders so that you don’t forget to pay your bills, which could save you from added penalty interest or fees.
6. Access to exclusive discounts or rewards.
Digital wallet providers often offer discounts or rewards with retailers or outlets that only their users can access. You might get money off or loyalty points which can be exchanged for free products or discounts. When the costs of living are increasing, any service that provides some cash or value back is welcome.
Sending money to a mobile wallet with Western Union
Digital wallets can also be for receiving money. Western Union’s app enables fast and reliable money transfers to friends or family abroad who have a mobile wallet. This makes it easier for people who do not have a bank account to receive money transfers from loved ones in different countries.