Money is continually the number 1 reported stressor in the lives of Americans according to the American Psychological Association, and yet financial planning is often set aside in favor of ‘want it now’ pursuits such as trendy restaurants and weekend getaways. It feels like there is never enough, what you have tends to evaporate to unknown places and it’s confusing to figure out who’s advice to take.
As money moves squarely into the digital realm, finances are communicated via numbers on a digital screen, which begs the question: how can we make finances feel real and immediate when it’s less of a physical thing these days?
Saving and spending habits have become visible and trackable by category in one dashboard through services such as Mint and Goodbudget. College graduates can receive smart forecasts and recommendations on how to pay down debt from multiple sources in a way that works for them through Tuition.io.
‘Nudge’ behaviors are being increasingly integrated to help consumers action on things they know are good for them: Acorns and Digit help you save without even realizing it by automatically squirreling away smaller pockets of money for you, causing huge future effects once compounding is taken into account.
Digital services are morphing into digital advisors that proactively and intelligently make more tailored suggestions than ever before. LearnVest harnesses the visualization benefits of technology as well as the ‘human touch’ of a real person for personalized financial planning. To make the future painfully real (trust me, I tried it), Merrill Lynch invites you to watch yourself physically age on screen through Meet the Future You to make you realize that your youth will fade away over time.
Several tailwinds are pushing towards this ‘immediate finances’ future: consumers are increasingly seeking transparent advice and direction, accessing all the information they need in their pocket and expecting services to help them visualize the meaning behind the numbers.
At the same time, there a couple of headwinds and ‘watch outs’ for businesses: consumers are wary of giving up their personal data, especially of the highly sensitive kind, and are skeptical that financial services companies have their best interest at heart. They seek reliable gatekeepers that will provide impartial advice without pushing towards certain products—the same way you might seek a personal stylist instead of asking a store’s sales associate how a sweater looks on you.
Opportunities exist to tie savings even more to tangible and aspirational financially-related goals— such as being able to travel X number of days in retirement, being able to contribute to your grandchild’s college fund and saving enough to start your ‘second act’ as a florist. If consumers can truly feel tomorrow’s challenges, they are more likely to make tradeoffs today.