If the 2008 economic meltdown and current state of affairs taught us anything, it’s to cut back on spending and save for a rainy day – or a torrential downpour. Since then, images from various news sources put faces on the jobs that were forever lost and on home foreclosures stemming from falling one payment too many behind on a mortgage. Last summer, I was walking my dog taking one of several familiar routes. Normally, this is a pleasant time. This is a time in the early evening when I can wind down from a caffeine fuelled day of work by walking a friendly and appreciative pooch.

As I was winding my way through many streets, I came across a house that had what seemed like a pile of garbage on the front lawn. Refrigerator, range, table, chairs, bed and a half dozen boxes. Knowing this route well, I found it quite odd as it was not garbage collection day. Was it perhaps a renovation, water damage, exterminator? As I got closer, I saw a little girl sitting on the front steps. Behind her, was a beautiful door complete with a yellow notice taped to it and a special padlock securing it. It was quickly apparent that this home was in foreclosure and the family had been thrown out. This little girl, who was probably as young as my own daughter (no more than 6-7 years old), was keeping watch on the only possessions that the bailiff spared. She would no longer play in the back yard, no longer play on the street with other children. On that day, that child grew up way too fast.

There are unfortunately far too many families who have gone or are going through this type of ordeal. Many entities could be blamed for their predicament and I am sure that every one of them (some more than others) had a part in it; banks, mortgage brokers, the economy, the government for not policing the industry enough, the homeowners themselves. But we seem to forget one thing that we should also point our fingers at – technology. Credit cards, the internet, debit cards and automatic teller machines all make borrowing, withdrawing and spending money incredibly easy.

Now for the record, I am not against technology. The technological advances in the medical and communications fields alone are nothing short of phenomenal. Technology enables doctors to treat patients more effectively, helps us to interact with people from around the world in a few seconds and everything from finding an exact destination to ordering pizza seems run-of-the-mill normal. But if we look at technology and the specific role it plays in our wallets, we realize just how financially deadly it can be. When it comes to personal finances, this is the silent technological cancer.

I remember as a child, going to the bank with my parents whenever they needed money to get through the week. Things like groceries, gas and paying the utilities. I also remember when my parents wanted to purchase something that went beyond the normal budget. Things like a new garment, furniture or simply taking out extra money because of an upcoming outing for a special occasion. In order to have the necessary funds, they had to go out, drive to the bank, fill out the little withdrawal request paper and stand in a long line waiting for a teller. Oftentimes, just because of the hassle required to withdraw money, they would change their minds, deciding that they really didn’t need a new black panther statue with the ashtray on its head anymore (hey, this was the 70′s!). Or that the winter coat my mom already had would do just fine for another winter.

Today, we seldom carry cash in the form of bills anymore. But this never poses a problem. Whether we see something we like in a store, are out with friends, need gas, get a hunger pang or simply decide to take a cab because it’s raining, our cash is just a card swipe away. And should we not have sufficient funds to for example, go on a vacation; out come the credit cards to the rescue! Growing up, I was always taught to only purchase things we can afford. Now, we get the things we want regardless of cost and base our financial viability on the amount of the minimum monthly payment. Because you have to admit that 60 equal payments sounds much better than 5 long years of debt.

Borrowing money is fine for a home, a car or an education. And using a credit card is fine too, so long as you can pay it off in 30 days. I mean, if we want to buy something substantial like a major appliance, I doubt that we carry $1000+ cash in our pockets. Today applying for any loan requires no more than a computer or Smartphone and an internet connection. I even have a friend of mine who purchased a new leather couch simply by filling out the credit application and the order form on the retailer’s website using his Smartphone. It’s important to note that we were at a football game when he accomplished this. Amazing? – Of course! Dangerous – absolutely! But all those purchases with low monthly payments add up. And before you know it, you’re tens of thousands in debt. Things change all the time. People get sick and can’t work or have to take on less hours because production is down or lose their jobs altogether. But those monthly payments come in like clockwork. Those never change and in fact, most of them, thanks to technology, are delivered right in our email inbox (so much for blaming the mailman anymore).

Technology was and is meant to make our lives better and in many respects, it has. But like any powerful tool, you have to respect it otherwise it will come back to haunt you. About four years ago, an old friend of mine was also spending beyond her means. Then one day, she was let go at work due to downsizing and suddenly those small payments became incredibly large. She found a new job but at a lesser salary. Along with her husband, she wondered why they were still struggling. They had become so programmed with the easy credit online and with debit and credit cards that they had to learn how to manage their money again. And one day, they actually took a look at their bank statements. To this day, they are still horrified at what they saw. All those purchase withdrawals, bank fees and automatic deductions due to those “low monthly payments”. They were burning through funds at a monthly rate of between $800 – $1000 more than what they were taking in. It still boggles their minds to this day…

In this virtual world, everything we see is always the same. The debit and credit cards we use are always in our wallets and never change in appearance. It’s a false sense of financial security. If you really want the real and gruesome picture, here’s a 30 day exercise you can do. Stop using plastic for all your purchases and instead, use cold hard cash. Because subconsciously, when you will notice all those bills flying out of your wallet, you will (at least I hope) stop dead in your tracks. You will have performed the best magic trick on earth. Now you see it, now you don’t…you’ll see your money vanish faster than you can earn it. When you run out of money, it hurts. When you pay for something in cash, you see and feel it. As for the cards, they’re always there so you don’t feel like you’re running out of money. They’re always in your wallet….

During my friend’s same financial revelations and subsequent spending overhaul, she had four credit cards all with running balances. She paid them all off and now owns only one card whereby there is no limit but whatever is purchased is due IN FULL at the end of the month. She now leaves her debit cards at home and whenever possible pays for everything in cash. When she runs out of cash for the week, she doesn’t withdraw more money until the next week. And finally, she sought financial counselling with a trusted advisor. It took her and her husband a few short months to rein in their spending whereby they went from running a deficit, to actually building their savings. The best part is that they don’t even miss their reckless spending. Now instead of frivolous purchases, they invest in their own savings. So the money is still being transferred only this time, to themselves.

Technology should be regarded as a useful tool and its power should never be underestimated. Too many people hit the “enter” button instead of the “escape” button on their financial keyboards. Continuing to do so may result in you sitting in front of your front door with a yellow paper and padlock dangling from it. But it doesn’t have to get to that point. Making some small changes in habit will make a huge difference. Again, I really do love technology; especially my new 50 inch flat screen LCD television. What I like most about it is the fact that it was only one easy payment…