Source: Kelly May, senior extension associate for Family Finance and Resource Management 

This year, there’s a new item to incorporate into your spring-cleaning ritual: thoroughly examining your financial applications.  

Right now is an opportune moment to sift through your financial apps, checking for any lingering balances. If you discover surplus funds sitting idly, consider moving this money to a high-yield savings account. Such accounts often offer more favorable interest rates and increased safety, allowing your money to grow.  

Additionally, extend this routine to include any rebate or coupon applications you regularly use. It's easy to accumulate rewards and forget, but periodically checking these apps can reveal significant redeemable value. Converting these rewards into cash or depositing them into a savings account provides security and potentially earns you interest. This practice tidies up your digital financial footprint, enhancing your financial security and growth. 

The decline in cash usage underscores a broader shift in consumer payment preferences. According to a 2022 study by the Pew Research Center, 41% of Americans reported not using cash for any purchases within a typical week. This trend highlights a pivot towards alternative payment methods, including debit and credit cards, digital wallets and money transfer applications. Such statistics reflect a changing landscape where digital transactions are becoming the norm, underscoring the importance of managing digital finances wisely. 

Digital payment platforms like Venmo, PayPal and Cash App are on the rise. These apps offer convenience and flexibility, making them popular choices for a wide range of transactions.  

A survey conducted by NerdWallet, in partnership with the Harris Poll, found that about two-thirds of mobile payment app users keep funds in their accounts. Notably, nearly half of these users have more than $100 in their account at any given time, suggesting a significant level of trust and reliance on these platforms for financial management. 

However, this trust may be somewhat misplaced regarding the security of stored funds. While these apps excel at facilitating quick transfers, they are not designed with the same protective measures as traditional banking institutions.  

Banks and credit unions provide insurance through organizations like the Federal Deposit Insurance Corporation – more commonly known as the FDIC – ensuring that customers' deposits are protected up to certain limits. Unfortunately, many mobile payment apps do not offer this level of security, leaving users' balances potentially exposed.  

This distinction is crucial for users to understand, as it affects the safety and security of their funds. In the digital age, being vigilant about where and how money is stored is more important than ever, prompting a need for greater awareness and careful financial management. 

For more information on financial success, contact your (COUNTY NAME) extension office.

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The University of Kentucky Martin-Gatton College of Agriculture, Food and Environment news and communications team provides monthly Extension Exclusives in the categories of Horticulture, Agriculture and Natural Resources, 4-H and Family & Consumer Sciences. To see more exclusives, visit https://exclusives.ca.uky.edu. 

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