It would be an understatement to say that Covid-19 has done considerable damage to consumer’s wallets since it hit the mainstream back in January of this year. Examining the most recent unemployment statistics for April 2020, in America stands at 14.7% unemployment and Canada right behind at 13%. The fact remains that millions of North Americans have seen their disposable income slashed to 0.
Saving money is always important, be it for retirement or for an emergency fund. But it’s even more so during a recession, when uncertainty is at an all-time high. Thankfully, many consumers are now using tech to help them save during the pandemic. Technology is providing ways to save that although they existed prior to this most recent financial crisis, are now skyrocketing in popularity.
These services and apps aren’t recession-exclusive and will likely benefit users for years after the recession fades away.
Personal Finance
It’s only right we get started with what may be the most important: Personal Finance. After all, you need a solid foundation to build a house on! During the early 2000s, most people’s idea of personal finance software was using an excel sheet for budgeting and maybe some tax preparation software. Fortunately for us, this area has seen some of the most exciting and interesting growth.
Through technology companies aim to provide a sleek and seamless way to connect all of your accounts in one place. Through continued incorporation of AI, they turn themselves into fully fledged financial advisors in the palm of your hand.
Using artificial intelligence, these applications scan through your spending habits, locations, categories and create recommendations on how to efficiently manage your money. Add in smart recommendations on paying off debt, and everyone stands to gain from these apps.
There is another key part of personal finances that has also been innovating at breakneck speeds in the last few years: The investment broker. There are several great high quality brokers available which is great for consumers as these companies duke it out to provide the best incentives and most comfortable experience.
Why Investment Brokerages?
In today’s day and age, many take for granted just how far brokerages have come thanks to technology. Back in the day, you would have to physically call up another human, ask for an order, hear the prices, decide if those prices were acceptable, and relay the order back to your broker. Sounds tedious? That’s because it was.
Then the computer revolution happened. Now users could buy and sell stocks at the click of a button, while seeing the prices for themselves in real time. Taking it one step further, today we have mobile phone apps that allow us to invest wherever we have a signal.
It’s hard to appreciate how important this is; after all, investing is one of the biggest drivers in long term wealth creation. Einstein himself said that “Compound interest is the eighth wonder of the world”. The Coronavirus has lowered the barriers to entry, meaning a higher number of people who otherwise would never have thought of investing, now get to join the markets, and reap the rewards. With the new ease-of-use, this may be the most invested generation yet.
New investors can now enter the investment landscape through brokerages allowing users to buy fractional shares of companies whose share price were particularly high (Such as Amazon or Tesla). What this means is that instead of paying over $1000 for shares, you could buy “half” a share for half the price, and still benefit from the upside, not unlike bitcoin.
Another strategy to draw in investors is many firms are announcing commission-free trading, resulting in exploding popularity, with investors gaining all around.
Ultimately brokerages hold the competitive advantage over DIY retail investing because there’s still a licensed professional on the other end who can help guide and offer professional insight.
Apps Offer Discounts
Everyone loves a good discount, right? But gone are the days of hunting for coupons in the back of magazines. Tech companies streamline the process to the point that it is nearly automated for a user to find a relevant coupon and apply it while shopping.
Companies like Groupon are constantly updating resources for all the best deals, both online and off leading to long term savings. Offerings are constantly expanding, resulting in consumers jumping at the opportunity for well-discounted deals.
Playing The Cards You’re Dealt
The Coronavirus is unique in that it impacts nearly everyone regardless of socio-economic standing, but we are finding ways to adapt thanks to technology. Many companies are discovering the effectiveness of remote work, allowing them to keep functioning and to keep employees on the payroll.
These companies have adapted and survived thanks to technology, and so should the consumer.
Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians, available now on Amazon and at Chapters, Indigo and major bookstores, and as an Audiobook on Amazon, Audible and iTunes.