Tracking spending, especially recurring spending, can influence people to better manage their finances. Banks and credit unions have the unique opportunity in this arena to help their customers achieve financial health.
And they should.
We’ll cover why people should track their recurring payments. Then, we’ll discuss why your financial institution should help them.
Recurring Payments Add Up
The reasons for the alarming state of most peoples’ personal finance are many. Stagnating wages, increased cost of living, and other issues all take their toll on the average wallet.
But one small cause of that might be recurring spending.
Recurring payments and subscriptions are usually minor:
- $12 for Netflix
- $10 for Spotify
- $60 for a gym membership
- $75 for an unlimited data plan
- ~$8 for Amazon Prime
At first glance, there’s nothing eye-popping. But the average American has 15 such recurring payments, and they usually total around $850. All those small charges add up quickly.
People pay less attention to smaller, recurring payments than they do larger, up-front costs. And all those smaller payments take their annual toll on a person’s financial freedom and ability to save.
Why Track Recurring Payments?
Most people don’t realize how much they spend on recurring payments. They don’t see how quickly all those small charges add up.
But how does tracking help?
At the risk of sounding crass or boorish, think about your last hangover. Perhaps a champagne toast on New Year’s Eve put you over the edge. Maybe Taco Tuesday turned into an extended margarita happy hour. But what probably happened was that you lost track of how much you were drinking, and that’s when you over-indulged.
Or maybe you started a diet once, and you realized that when you tracked your calories, you were more mindful of how you consumed them.
Either way, monitoring your interactions with something make your more aware of its effect on you. By tracking recurring spend, people more effectively manage their money.
Prioritizing Financial Wellness
Your account holders want financial wellness. And the road to wellness is paved with financial education, freedom, and security.
Monitoring recurring spending gives people the tools and resources they need to attain it. Merely providing transparency—a digital footprint of their financial habits—is one half of the equation. Granting the ability to change or modify payments and subscriptions is the other half.
Recurring payments aren’t one big blow to financial wellness. But too often, it can be a death by a thousand cuts.
If you prioritize financial wellness for your account holders, they’ll be more successful. They’ll be able to apply for the car loan they want, or the mortgage they’ll need. People with more savings buy CDs, get Money Market accounts, and invest.
Not only that, but your customers and members will know that you helped them achieve their goals. That leads to satisfaction and loyalty.
Ultimately, it’s in your financial institution’s best interest to offer this level of transparency and control.
How to Provide This Service
For Wells Fargo customers, they get a limited version of this service through their Control Tower app. For everyone else, there’s WalletFI.
WalletFI provides a white-labeled payment management platform for financial institutions. It leverages AI to identify recurring spend and help banks and credit unions reach top of wallet with their card holders.
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