Online banking: banish rear-view budgeting
Published 17 April 2014 by Linzi Nuttall
Why ‘rear-view mirror’ banking is bad news for good budgeting.
Trying to keep track of your finances and plan for the future using just your paper bank statement is a little like ‘rear-view mirror budgeting’. You’re trying to budget by looking backwards at payments you made and received last month, rather than forwards at the money you’re going to have and whether it’s enough to cover your outgoings.
When you’re relying on the information in a paper statement, it can be hard to even remember what each transaction listed there was for. This looking back can make the already difficult task of household budgeting even tougher to keep on top of.
And that’s if you even open your bank statement in the first place. A survey conducted for us in January* revealed that a third of people name bank statements as the type of mail they’re least likely to open. Instead, it goes in a pile, or in a folder, and you never know what it says.
Check your statement whenever you want
Today, all that has changed. Most account users now have online banking, which means not only can you transfer money at the click of a mouse but you can also see exactly what’s gone into and out of your account. You can even check back every day if you want to.
However, although online banking makes life easier it still leaves you trying to budget while looking backwards or, at best, at the present rather than the future – which is what you need if you want the peace of mind that your financial commitments will be sorted each month. So, what’s the solution?
Make household budgeting simple
At thinkmoney, there’s no such thing as rear-view budgeting. Our online account management not only shows you what’s gone in and out of your account, but also what’s expected to go out in the future and whether you can afford it.
Our customers, who pay a fee for their accounts, just have to log on to their account management to see what money we are expecting to come in over any period - from the next few days up to the next few months. We’ll also display the bills that we’re budgeting for from that income; how much we’ll be holding to cover them; and how much we expect to be able to transfer to the card part of the account.
If everything is running smoothly and all the expected bills are fully budgeted for then customers who log in are greeted by a green smiley face. This gives you the peace of mind that your budget is working exactly the way it should.
If, however, you’re met with an amber face, this means something on your account needs to be reviewed. If it’s red, meanwhile, it means your money manager thinks that there’s going to be a shortfall on your account and you won’t have enough to pay one of your bills. Don’t panic though – just give one of our money managers a call and we can talk through the problem and the possible solutions to help get your finances back on track – before the problem has even arisen. We’ll work hard to make your budget work for you.
This forward-thinking way of budgeting is not the only benefit thinkmoney offers though – there are many others as well. Find out more about our alternative accounts here.
*OnePoll questioned a nationally representative sample of 2,000 adults aged 18 and over between 10th January and 15th January 2014. Figures have been extrapolated to fit ONS 2013 population projections of 50.3m UK adults.
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