What if mom always could be at your side and make you think twice about whether you really should spend an extra $50 on yet another night out with the girls?
OK, who really wants to hear from mom all the time? But what about your bank? Could you give up mindless spending if you got a nudge from your banker?
As we move into the season of New Year’s resolutions, expect to hear more from banks and others about how to do a better job at tracking your spending and saving more money.
“You might not always love what you’re hearing. But everybody needs a coach, a mom or a friend,” said Andy Harmening, senior executive vice president, consumer and business banking director for Huntington Bank, which operates in eight states, primarily in the Midwest.
Huntington is running ads now that highlight a “Heads Up” alert where customers can set a monthly amount to spend on shopping, groceries or restaurants, or whatever.
Then, during the month, the bank sends a heads up via your mobile phone, laptop or computer to keep you on track. You might get a notice like: “You’ve spent $300 of your $400 budget for groceries this month.”
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Can a drone stop you from spending?
One of the Huntington TV ads uses a clever “spending drone” that hovers above a couple on a special date night in a fancy restaurant. The young man starts out trying to order “oysters.” The drone says: “Over budget.” He moves on to “lobster.” The drone says: “Over budget.”
You get the picture. Soon, you’d expect the couple to run out the door, jump in the car and head to a more budget-friendly spot with a drive thru. Stay tuned.
The bank can help consumers who want to participate track spending by category as the customer uses Huntington debit and credit cards.
The bank can help you get started by setting up a few budget categories based on your spending history. Beginning in early 2019, the Heads Up program will integrate artificial intelligence tools to provide customers with up to 40 key insights into their financial wellness as they set goals.
Talking about money around the kitchen table
Harmening said the “Heads Up” approach came out of focus meetings where bankers literally sat with customers in their homes around the kitchen table asking them what matters the most to them. He said the “proverbial kitchen table” is the centerpiece of where real conversations happen.
The bank created what it calls “The Hub,” a new digital banking experience that’s free to all its customers. The bank is able to review spending trends for the past 12 months and help people set a budget. The bank’s philosophy is that it’s not just big events that require some planning and a heads up. Little everyday moments need some financial planning, too.
The game plan includes helping customers categorize their spending so they can better understand how to change some habits going forward. Customers also are able to set up a monthly spending limit by category. So if you only want to spend $100 a month on eating out, you’d do a better job tracking that spending throughout the month.
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A look-ahead calendar also provides a financial view of the month to come, so customers get a better handle on when bills and deposits will hit their accounts and plan accordingly.
Such programs can help customers review where they’re already spending money. As a result, for example, customers may find it easier to spot recurring subscriptions to services they didn’t even realize they were still paying for but not using.
Customers said they wanted help keeping their financial goals front and center, according to Huntington.
“They said: ‘Make it easy. Be proactive. We might not always appreciate it. But we need it,’ ” Harmening said.
Watch out for big and small money drains
Most people can use some help tracking the big money drains in their life. Maybe it’s all that money they’re spending buying lunch each day. Or getting a coffee on the way to work. Or splurging on a new video game or a new sweater a few times a month.
Maybe you spend too much money when you’re trying to impress a date. Or you’re overtired and shopping online late at night.
In the old days, people would talk about using spending envelopes to set aside cash that you can use on groceries or rent. Or people would be encouraged to write down how much they were spending each day on incidentals.
Now we’re living in a digital world where you are able to set up another sort of system. For those already facing big bills, tracking small expenditures really can add up and help with a budget.
Take someone who is juggling college loan payments. “What happens with student lending is it creates pressure on your cash flow,” Harmening said.
But if you’re able to suddenly save an extra $100 or $200 a month, it makes it a lot easier to pay that $300 student loan bill each month.
Kicking mindless money habits is a theme that we’ll likely hear more about in the New Year.
After big spending moments – which can include everything from Black Friday and Cyber Monday sales to holiday gift giving and trips to visit family – plenty of households start out 2019 in the red. Even finding small ways to cut back right now can help as many wait it out before receiving a big tax refund in February or March.
Take something out of the cart and put it back
Ally Bank announced in late December that it put 48 of its customers to a test of sorts with four savings challenges to overcome “absent-minded and needless spending habits.”
On average, the bank said, the customers found they could easily save $50 using just one of the strategies.
How did they do it? Some took a hard look at what they were buying each week and then focused on cutting out one or two such purchases each week.
Some signed up for a “shopping cart challenge” and agreed to review what’s in the grocery cart before they check out. Then they’d remove a few items each trip, particularly if the goods turned out to be more of a “want” than an legitimate “need.”
Some eliminated spending money each month on services that they weren’t using each month – such as streaming music, online video games and the like. Others aimed to shop “responsibly” online. The idea was to leave items in the online cart, wait a while and then avoid making whatever purchases that you can.
Some found the best savings by reconsidering their online purchases by waiting a day or two.
Mindfulness is a buzzword for all sorts of things these days. Being aware of your present self and surroundings can help cut back on stress, improve sleep and, yes, maybe even control your spending.
Contact Susan Tompor: email@example.com or 313-222-8876. Follow Susan on Twitter @Tompor.