If you told me five years ago I'd be paying $1.49 each month for storing photos I'll probably never look at again, I would have said you were dreaming.
As a friend once wisely said to me: “I never asked for the cloud to be in my life.”
Regardless, the cloud is in my life and definitely here to stay, probably the $1.49 charge too. But it got me thinking – do I really know where my money is going? I tap my credit card like I’m on auto pilot and seem to be making never-ending “micro transactions”, payments under $10 that fly under the radar.
To get to the bottom of this conundrum – and please my wife – I decided to do a self-audit on my spending habits with the help of some tools on my mobile banking app (shameless plug) we’ve rolled out over the years at Westpac and the Group’s brands, such as St.George.
Somewhat scarily and also unsurprisingly, I quickly realised there was quite a disparity between assumptions versus reality of where our money was landing.
First off, I had no idea I was spending so much on Bernard, our new and deceivingly expensive cavoodle x cocker spaniel, who doesn’t mind the odd parlour pamper or the criminally priced puppy biscuits.
Secondly, I was slightly surprised that spending on “clothing and shoes” failed to outshine the other categorises on our credit card. Rather than my wife’s love of strappy sandals, it was in fact my tendency to grab those easy but highly priced sushi rolls for lunch and Friday night drinks with the boys, both surprisingly notable dents in the credit card statement.
I’ll admit; it also became blatantly clear that I'd become a little too fond of the smashed avocado with a couple of poached eggs and takeaway coffees.
This is where the recently launched spend category feature in the St.George app helped me not only understand where my money is going at a glance, but provide a month on month view of what I’m spending. Every transaction on my card is automatically categorised and aggregated so I can easily see how much I spend on food and groceries, including how much relates to dining out. Being able to view my total spend by category ensures nothing is missed in my aforementioned long, long list of micro payments.
As it became clearer where our money was actually going, I started to increasingly question whether I needed that third coffee for the day. An effective deterrent came from using the instant payment alert by making spending that little bit more painful and forcing me to question whether I actually need whatever I was buying.
In an increasingly cashless world, it’s similar to the psychology associated with spending physical cash back in the days of my youth.
My audit also forced me to change my spending behaviour across two cards that was making it difficult to track how much money I was spending, let alone what it was being spent on.
I started to notice all the direct debits I’d accumulated over the years automatically siphoning out cash each month, but I’d not reviewed to see what value I was getting. Things like my car and health insurance, electricity supplier and on demand services, many of which I culled or changed.
This, of course, isn’t exhaustive: our Westpac app offers additional handy features such as the option to restrict your credit transactions, or set up regular monthly repayments to stay on top of your credit card balance (sorry, one last plug), but those on the St.George app worked for me. As getting that extra information helped remind me of the value of money, adjust who I give my cash too and make better decisions in the moment when those impulse purchase occasions pop up.
By Michael Bennet
Editor, Westpac Wire