5 money trends to watch

While most of us still carry around paper bills and coins in our pockets, there's no doubt the future of money is wrapped up in continuing digital advancements. The good news? That technology can help make managing your money easier, more efficient and more transparent. Smartphones, for example, allow us to transfer money to friends, pay bills and make investments — all with devices that, like those bills and coins, slip right into our pockets. Here are five key digital financial trends worth paying attention to in the years to come.

1. Automated saving is getting smarter. Saving money on a schedule is key to balancing your monthly budget, and banks have long offered automatic transfers from checking to savings accounts to help you put money away. But a new breed of online banks are stepping up the saving game. A few use a version of artificial intelligence to learn about your earning, saving and spending patterns, then put that knowledge to use by pulling funds from your account that you won't miss. Some even offer interest and customizable schedules to help you save for short- or long-term goals. Be sure to confirm that the app or bank is FDIC insured, so that your money is safe, and always check the fee structure to make it worth your while.
2. Investing is moving to smartphones. You can still call your stockbroker to make investments, but now you can open an app as well. Investing a percentage of your money is a key way to make it grow over time, because while stocks may have more risk, they also offer the possibility of higher rates of return than the interest rates that banks usually offer. Some of the new apps offer zero commissions on trades, which means that you can buy and sell stocks without worrying about fees. And, if you are new to investing, some of the new apps provide information that will help you to better understand how investing works, and others offer automated investing. Make sure any investments you make are within your risk tolerance.
3. Banks are mixing with the "sharing economy." If you've split a restaurant bill with friends via an app, you are already participating in this trend. Traditionally, banks and financial companies were more involved in payments between individuals, but as the sharing economy becomes more integrated with finances, technology takes a bigger role. Think of it like this: 10 years ago you may have mailed your landlord a check, which your bank had to supply you, but today you may just send your money with a few clicks on your phone. As transferring money on a peer-to-peer basis becomes more common, the role of technology grows and the role of the underlying banks changes significantly.
4. Voice interfaces are improving. Voice-recognition software is getting smarter, and it will continue to be integrated into your interactions with your financial institutions. When you call your bank today, you may talk to automated "chatbots" who understand your speech. This is because computers are getting better at understanding our natural language. Those same chatbots will greet you when you "talk" to your bank on its website's chat function, and some home smart speakers already tout their ability to check your bank account balances and make payments just by asking. Communicating with your bank and financial institutions is a key part to smart budgeting, and the 24/7 access to information and transactions that chatbots offer will help you to manage your money on your own schedule.
5. Transactions are getting more transparent. Making sure you're a smart consumer is key to managing your money, and that means price shopping. An emerging technology called blockchain essentially records transactions in a way that makes them permanent and irrefutable. What does that mean for your finances? Say you are shopping for a condo and you find one you like. If the previous sale was recorded via blockchain, the transaction would not only include the purchase price, it would also include a record of the state of the property, the taxes and fees, and any disputes. While that may not seem that amazing today, think about buying the same condo 100 years from now: You'll be able to access decades' worth of transactions in one place.

If you are interested in participating in these trends, start by researching what online technologies your current bank offers — they may have budgeting and savings tools available online. If you want to learn more about financial literacy in today's changing world, read "6 ways to improve your financial literacy."

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