How has Covid-19 changed your relationship with money?

By Julie Nipperess

When the threat of coronavirus hit at the end of February, and we were all asked by retailers to use cards instead of cash, for most of us, it wasn’t too much of a stretch.

The digital revolution in banking has been underway for some time and Australians are using cash less now than ever before.

Male hands using smart phone while typing on ATM

Changing the way we spend

But the chiefs of the banking industry say that Covid-19 has definitely sped up this revolution. In fact, ATM usage in recent months has plunged by about 40 per cent compared with last year, while branch traffic fell about 50 per cent from February to April. Of course some ATMs and branches were also closed during lockdowns which could impact these figures.

But they’re supported by the value figures for ‘contactless payments’ – that’s those payments made by cards and phones, or via an app for things like ordering home delivery, which are up about 65 per cent.

Overall, this wider shift in consumer behaviour over the past 10 weeks or so has fast-forwarded the digital money movement by about five years, and the change is likely to be permanent because lockdown also made people who are not normally savvy digital users, really have to embrace technology to find movies to watch, and go online to connect with family and friends or school and the workplace.

But are we ready?

Well yes, we’re most certainly ready. The banks have been implementing this change incrementally.

Mobile payment

Cash Vs Cards

And for you, there are pros and cons.

Carrying around cards instead of wads of cash is safer (if you lose your wallet), and cards are pretty convenient.

But I am also a little wary of creating an over-dependence on them, particularly if you are trying to get ahead and save.

Hands holding plastic credit card and using laptop

Mindful money management

It’s no secret that cards, in particular credit cards, have changed our psychological relationship with money, and often, because our relationship with a card is very different from watching the cash actually leave our wallets, we can have a tendency to lose track of what we’re spending, and then over spend.

But as we use cash less, the trick to staying on top of your spending is (you guessed it) budgeting, and mindful money management.

Knowing exactly what is coming in, and exactly what is going out – what you are earning and what you are spending – is the only way to control your finances. Especially right now if you find yourself living on a reduced income, as a result of the coronavirus pandemic.

Woman using uber eats app on Mobile

Regularly check your transactions and statements

Security is less of an issue because banks are really top notch at this, but it doesn’t mean you should be complacent.

Scammers are clever and are occasionally able to find ways to outsmart even the best cyber security systems.

So keep receipts and make time on a regular basis to check your transactions. Occasionally mistakes are made, and if it’s a bank error or potential fraud then you are entitled to get your money back.

Hands of man are holding smart phones and using laptop

Mortgages and other lending

It might be that the digital end-to-end mortgage application is not far away either.

Many banks have been trialling online loan applications, but mortgages are complex and there are strict processes in place to ensure bank compliance.

Now, though, with the digital revolution speeding up, these could well be in place before we know it.

Change is here, and we need to embrace it by making sure we keep our own finances firmly in focus.

If you need help with any aspect of your finances, please don’t hesitate to contact us.

Need more information? Get in touch with Step Up Financial

    • 107 Moulder Street,
      Orange, NSW 2800

      PO Box 2499
      Orange, NSW 2800

    • (02) 6362 5445