The Role of Digital Banking in Financial Wellness
Reading time: 7 minutes
October 11th, 2024
Digital banking is managing your money using online tools like websites or apps. You can complete all the same tasks you would in person — depositing checks, monitoring your account, and paying bills — at home or on the go.
According to a recent survey from the American Bankers Association, 72% of Americans use digital banking to manage their finances. Even if you already use digital banking, you might not be taking advantage of all the services and features. Online banking allows you to manage your accounts quickly, budget more effectively, and automate your finances. It’s a win-win for you and your money.
Whether you already use digital banking or have yet to take the plunge, here’s how to maximize its benefits.
Convenience at Your Fingertips
Digital banking can make life easier through streamlining your money management. You can access your bank accounts, transfer funds, pay bills, and monitor your spending from anywhere. Instead of visiting a branch to manage your money, you can do it from anywhere with digital banking—at work, home, or on a trip.
You can simplify your life by managing these money tasks from your phone or computer.
- View accounts: Online banking lets you view your accounts in seconds. You can look at account balances and transfer funds. You no longer need to manage a transaction log or visit an ATM or branch location to know how much money is in your accounts. You can also make transfers to friends and family through mobile or online banking with Zelle.
- Bill pay: You can pay your bills online through digital banking. A bill pay service helps ensure your bills are on time by scheduling payments in advance. For example, you can pay your utility bill on the same day each month. This eliminates the potential of delayed check cashing, which can negatively impact your budgeting. It also ensures you won't accidentally lower your credit score by forgetting to make the payment.
- Monitor spending: You can discover savings opportunities by monitoring your online checking account. The best banks with digital banking solutions provide spending snapshots that make it easy to view your budget. This feature helps you recognize potential fraud in near real-time, which will help you minimize the impact of a scam.
- Check deposit: Many banks offer the ability to deposit checks through the mobile app, which enables you to cash checks more quickly than you could if you have to visit a branch or ATM.
- Security alerts: Most banks have additional online security features. For example, you might be able to set security alerts for purchases over a certain amount or temporarily freeze your debit card.
Budgeting and Financial Planning Tools
Most banking apps, including the Bank of Hawaii mobile app, have built-in budgeting and financial planning tools. These features allow you to categorize your spending, set budget limits, and track your progress toward financial goals. You no longer need clunky spreadsheets, separate apps, or pen and paper to track your spending. Instead, you can do it all in one place through your bank.
When you’re busy, it’s easy to lose sight of spending. In fact, according to a 2022 ALICE study, 42% of Hawaii residents reported that they often live paycheck to paycheck. But here’s the good news — digital banking budget tools can help break the cycle.
How Digital Banking Tools Help Your Finances
Let's imagine you're out to dinner with friends. It's been a long work week, and you're excited to relax. Your friends ask if you want to stick to happy hour or a full dinner—the price difference is about $60.
As the group discusses, you quickly log in to your mobile bank account to view your budget. It turns out that your remaining eating-out budget is near $0, so you suggest sticking to happy hour. Everyone agrees, and you can enjoy a few hours of stress-free time with friends. It might seem like a small win, but the truth is that every dollar counts. Digital banking tools make it easier to make informed spending decisions.
Beyond budgeting, the best online bank tools can also help you earn more money. Most banks have exclusive offers for digital banking customers. For example, you can often discover savings accounts offers through online and mobile banking, which allows you to earn interest and grow your money faster.
Automated Savings for Effortless Growth
Digital banking, also called online or mobile banking, makes it easy to automate your savings. You can set up recurring transfers from your online checking account to a savings account.
Automated savings are a great way to effortlessly save money, especially in Hawaii, which has the highest cost of living in the nation. The good news is that when you take advantage of automated savings, you can build a safety net for unexpected expenses or fun extras.
For example, imagine you use your bank app to set up an automatic transfer to your savings account at the beginning of every month, starting with $75. At the end of the year, you have an extra $900. The following year, you get a small raise at work and decide to save $150 per month. You save an additional $1,800. Your savings account now has nearly $3,000, and you decide to use the funds for a family vacation to a nearby island.
Here’s how to get started with automated savings.
- Track your spending: Start by tracking your monthly spending. Notice your monthly spending and whether any money is left over.
- Set an amount: Based on what you learned from tracking your spending, determine an amount to save each month. Set an automatic transfer from your checking account to your savings account on payday.
- Readjust as needed: Try the automated savings system for a few months and see how it goes. You can always raise or lower the amount you saved based on how it goes.
Conclusion
Living in Hawaii comes with unique financial challenges due to the high cost of living. But it also presents unique opportunities for creating a balanced lifestyle. Digital banking is an easy way to take advantage of tools from your bank. It’s a convenient way to manage your money, grow wealth, and stay financially healthy.
To learn more about how mobile and online banking can help you achieve your financial goals, visit our digital banking tools or apply for a new account online.
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