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bankruptcy experts

Last week we discussed apps that can help you budget. As we’re now moving away from the “cash age” to the “app age” we’d like to explore the use of digital wallets, what bankruptcy experts have to say about the topic and whether they’ll help you budget or blow the budget.

What is a digital wallet

A digital wallet is the equivalent of the physical wallet you have on your desk or in your pocket or your purse. A digital wallet refers to an electronic device that allows an individual to make electronic commerce transactions. This can include purchasing items on-line with a computer or using a smartphone to purchase something at a store. An individual’s bank account can also be linked to the digital wallet. There are two types of digital wallets:

Smartphone app for making financial transactions in a retail store such as the Starbucks app
Desktop app for making credit card purchases online such as PayPal

Our list of the 4 most popular digital wallets

PayPal: One of the most popular and trusted digital wallets, boasting an impressive 173 million users across 203 countries and 26 currencies

Apple Pay: For iPhone, Apple Watch or iPad – simple to use and works with the cards you already have on the devices you use every day

Android Wallet: Google’s mobile wallet app for Android-powered phones – use it to tap and pay in stores and you can use it to make in-app payments

Samsung Pay: Enables you to tap and pay using your Samsung Galaxy phone (only available for use with newer Samsung Galaxy phones such as the Galaxy S6 Edge and/or the Galaxy Note5) at brick-and-mortar locations

Will a digital wallet help you budget of blow the budget?

The only true way to control your spending is to pay with cash or debit because if the money isn’t there, you can’t make a purchase. Digital wallets can enable credit card purchases more quickly and conveniently than having to take out your credit card.

As bankruptcy experts, what we worry about is does using a digital wallet, combined with the ease of online shopping, encourage overspending? The speed at which you can process a payment certainly gives you less time to think about it. If you’re prone to overspending, a digital wallet will help you overspend even quicker. If you’re diligent about staying within your budget, then a digital wallet will be a convenience.

What to do if you’re overspending and deep in debt? Go see one of your local bankruptcy experts – a licensed insolvency trustee

Apps are not going to help you; there is no replacement for the help of a professional trustee. We have the expertise to help you manage your debt and get you back on track to living a financially healthy life Starting Over, Starting Now. Give the Ira Smith Team a call today and book your free consultation.

If we get to see you early enough, at the first sign of trouble, you can utilize and implement one of the bankruptcy alternatives, to free you from the burden of your company’s financial challenges to go on to be a productive, profitable employer allowing management to focus on business growth and not be plagued by debt problems.

People consider us bankruptcy experts because we wrote the eBook 12 THINGS A LICENSED INSOLVENCY TRUSTEE MAY NOT TELL YOU!. CLICK HERE to get a free copy of the eBook.

Going cashless may drive you to a consumer credit proposal

The good news is that Canadian consumers have more credit, debit and app options than ever before. The bad news is that going cashless makes it easier to overspend and as a result, before you know it, you could be in serious financial trouble.

A recent online survey by processing payments firm Moneris found that:

77% of respondents preferred to pay for purchases by debit or credit card
65% said they rarely buy anything with cash
There is a 162% increase in tap transactions for the third quarter of 2015 compared to the same period in 2014

Easy credit may drive you to a consumer credit proposal

The reality is that we really don’t need to carry cash anymore. Almost everything can be transacted by credit or an app tied into your credit card now. It does seem like we’re moving towards the end of cash; not today, but eventually. Mobile apps like Apple Pay are the future. PayPal, allowing you to charge purchases to your credit card has been available for years.

The problem with all of these modes of payment is that the control of paying with cash is gone. In days gone by the amount of cash on hand dictated how much you could spend. Sure, some stores offered layaway plans but by and large if you had no cash, you couldn’t make a purchase. Even with the lay-away plans, until you paid for the item in full, you didn’t get to bring it home.

According to Jeff Schwartz, executive director of Consolidated Credit Counseling Services of Canada, “Without the physical attribute of taking cash out of your wallet and paying for something, we’re missing one of the senses that allow us that brake on some of the decisions that we make. This disconnect is a concern because with the average Canadian over $20,000 in debt on the unsecured side, it’s a challenge. So we’re already having trouble paying what we owe. Do we really need to make it easier to part with our money?”

Take action now with a consumer credit proposal

If you’re having serious financial problems due to cashless spending, or for any other reason, the Ira Smith Team is here to help. With just one phone call you can be well on your way to living a debt free life Starting Over, Starting Now. Contact us today.