D is for Digital Technology, and it’s Drain on Finances

D is for Digital Technology, and it’s Drain on Finances

 

In a world driven by technology, we are continually intrigued by the latest and coolest gadgets. Many of us gain great pleasure when we update our old devices for newer models, and we relish the potential life improvements it brings us. But have we considered how technology drains our savings and investment accounts; especially when technological advances have no end in sight?

As consumers, we must not mistake these purchases with investments. When you invest wisely, you will increase your value, but when we buy electronics, just like a new car, it will depreciate rapidly after its purchase.

We all want the benefits that digital technology plays in our new world reality. And we have become entirely reliant on our devices to provide us with constant and instant access to a world of information and entertainment. With a click of a button we can shop, watch movies, buy music, play video games and download a variety of apps, so how can this be bad?

Have you considered how much money you’re regularly spending with this new technology?  Just like the ease of swiping a credit card which led many consumers into debt, so can the ease of pressing a button for purchases.

Just be aware and think before you fill up your online shopping cart and place your order or download the latest app, movie, and book – or purchase the most recent new gadget. Here are some tips to help you manage your digital spending:

Evaluate your spending – how much are you spending on new services and devices? Every $1.99 purchase adds up, especially when you download an abundance of apps or songs each month.

Create a budget – decide where you can cut cost to put into your savings and watch your investment grow instead of watching your devices depreciate.

Be Mindful – Before you make a purchase, be sure you really need the item. Be strong when it comes to impulse purchasing using digital technology.

Purchase last year’s model – when a new more expensive model is released, the older model’s price drops giving you a significant savings potential.

Buy Refurbished – many of these items are returned gadgets that have never been used but can save you money – just be sure it comes with a warranty.

Digital technology isn’t going away, and neither is our desire for a secure financial future. If we take a good look at our spending habits on technology we can begin to make better choices and stay within a budget to help create a healthy financial future.

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About Ann Zuraw

Ann Zuraw, the voice behind "Chicks, Chat and Change", is a Certified Financial Planner (CFP®), Chartered Financial Analyst (CFA®), and Certified Divorce Financial Analyst (CDFA™). If you have comments on this post contact Ann Zuraw

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