{"id":2664,"date":"2018-07-25T00:00:00","date_gmt":"2018-07-25T00:00:00","guid":{"rendered":"https:\/\/www.rbcwealthmanagement.com\/en-us\/insightshow-technology-is-changing-how-we-value-money\/"},"modified":"2023-11-01T11:05:10","modified_gmt":"2023-11-01T15:05:10","slug":"how-technology-is-changing-how-we-value-money","status":"publish","type":"post","link":"https:\/\/www.rbcwealthmanagement.com\/en-us\/insights\/how-technology-is-changing-how-we-value-money","title":{"rendered":"How technology is changing how we value money"},"content":{"rendered":"

While technology has given us more control over our financial lives—online shopping, online banking, mobile payments, automatic deposits—it may also be changing how we view and value money.<\/p>\n

Growing evidence suggests technology is affecting financial decision-making, and when coupled with deep-rooted financial attitudes and behavioral biases<\/span>, there can be some real negative consequences.<\/p>\n

These biases—combined with emotion—can drive investors to make bad financial decisions, says Angie O’Leary<\/a>, head of Wealth Planning for RBC Wealth Management–U.S. People’s social media networks, for example, may influence irrational behaviors, their need for instant gratification and an over-reliance on inaccurate information, she says.<\/p>\n

On the other hand, technology can be a friend. Mobile apps help people better track their finances and help them overcome behavioral biases, such as overconfidence on limited information or an aversion to losses, O’Leary says.<\/p>\n

Psychologists Daniel Kahneman and Amos Tversky pioneered research <\/span>in behavioral finance in the 1970s, and found investors tend to shy away from uncertainty and make decisions based on incomplete information or irrational thought.<\/p>\n

People’s financial attitudes and resulting financial behaviors, such as budgeting or impulse shopping, tend to start in childhood. Lessons over time from other influences, such as school and social media, further shape attitudes towards money.<\/p>\n

O’Leary says taking the emotion out of your finances should be the top goal in making better decisions. The best way to do that is to create a wealth plan<\/a>, which helps set budgeting, saving and spending goals, taking into consideration financial risks and future life events, to help investors stay on track toward their short- and long-term financial goals.<\/p>\n

While technology may help us make more informed financial decisions, “having a trusted advisor is still an important part of helping clients be aware of their biases and understand when their emotions kick in,” says O’Leary, who leads a team focused on goals-based planning, which identifies, tracks the probability of success, and figures out how to fund investors’ goals.<\/p>\n

Here are some ways that technology may impact how we view money in our daily lives. <\/p>\n

Technology as a negative financial influencer<\/h2>\n

Today’s digital world often means people have a broader network of potential social influences than ever before. But some of those influences can negatively affect financial decisions, according to O’Leary. <\/p>\n

Examples could include:<\/p>\n