How the internet changed our relationship to money.

It’s January—wait for it—2023.

We’ll just let that sink in before we start…

talking…

about…

money.

We know, you’d rather not think about it. But, we really should all sit down and have a chat about money and how the internet has changed (or not) our relationship with it. And, you know what, now’s as good a time as any. We’re all broke from the holidays, inflation is destroying our savings—and our grocery bills—and there’s talk of a recession.

“Jeez David, way to kill the vibe.” Well, somebody had to. Why, you ask? Good question. It all started with Julie, oxio’s VP of Marketing. We were chatting about our relationship to money and, well, Julie casually let this slide:

On average, being the polite, responsible Canadians that we are, we’re actually not the worst when it comes to knowing about our own money. No really, we asked.

Seriously though, that’s not the worst. But, the real question here is: has our relationship to money changed and did the internet have anything to do with it?

The internet has changed our relationship to money in a few pretty obvious ways:

Okay, let’s spend some time chatting about each of those. And, as always, we’ll throw in our two cents too.*

*Sorry not sorry. The money puns were just too easy.

They’ve been around for a while now, since 1967¹ or 1969² depending on who you ask, and were step one in the world’s digitization of money. ATM’s made it easy to withdraw and deposit our money. No more waiting in line to talk to a teller. No more waiting for the bank to be open. No more going to your bank. The ATM really was step one in getting us all used to using machines to purchase goods. For better or worse, movie theatres, grocery stores, pharmacies, public transit, they all now rely heavily on their own version of the ATM to sell us things.

ATMs also allowed banks to start charging us money to withdraw our own money and now earn—or I guess just straight up make, cause they definitely don’t earn it—billions of dollars a year from fees.³ Sneaky buggers. All that to say, ATMs have pretty drastically changed the way we interact with our financial institutions and our money. They even, if you think about it, removed one pretty important interaction that forced us to talk about our money, check our account balance, and ask people who actually know what they’re talking about any questions we might have.

Thanks to the internet, it’s really, really easy to find financial advice these days. Whether we’re looking for it or not, we’re constantly being influenced by who we’re following on social media. The articles that the algorithms select for us. Our friends and family (this one isn’t new). What is new, is the lack of financial advice from people who know what they’re talking about. Doing all our banking online is definitely convenient, but it means we rarely talk to people who actually work in the financial industry—unless we seek them out. So, yeah we do have access to more opinions, but those opinions might just be having a negative effect on how we interact with our money.⁴

How, you ask? Well, according to Alan Wolberg, a senior wealth planner with City National Bank, there are a few ways technology is negatively influencing our financial decisions:

It’s been pretty well documented and accepted that we tend, thanks to the algorithms of the sites we get our news from, to gravitate toward and identify with information that’s in line with what we already think we know. This can affect our financial behavior by reinforcing our bad habits or convincing us to try something new that may or may not actually be in our best interest. Crypto anyone?⁴

Just over 57% of Canadians get their news from social media. And for those of us under the age of 34, that number hovers around 65%.⁵ Now, we’re the first to agree that the internet has made accessing information easier—and that’s a good thing. But, with over half of us just trusting everything we read or hear or see online, we also think we can all do a better job of vetting the information we get online.⁶ My mom always told me not to believe everything I read. Well, she was (and usually is) right. The information we get online (from blogs, social media, influencers, etc.) can be unreliable and lead to some pretty sketchy decisions. This can have some pretty real consequences—especially when it comes to our money.

Online shopping is a beautiful thing. And also a horrible, awful, terrible thing. In 2020 82% of us Canadians shopped online and spent a total of around $84 billion—a pretty epic increase compared to the $57 billion we spent in 2018.⁷

We all know the pros of online shopping: not having to actually go to a store, all the choice in the world, and, of course, the reviews. (More on that in our article: How the internet democratized reviewing.) But the cons are real folks: impulse buying, suggested items that you might also love, minimum order amounts for free shipping, and never exchanging actual, physical money means it’s easier to spend more and not think about—or even realize—it.⁸

So, what if electronic/digital money is easier to spend? We gotta keep the economy (whatever that is) rolling, right? Well, yeah kind of but also not really.

Our increased reliance on digital money (debit cards, credit, paypal, etc.) has some positive benefits. It’s convenient and, in theory, allows us to track our spending in real time. But, just because we can, doesn’t mean we do.

As we replace physical dolla dolla bills with digital transactions, how we value our money changes. Aka, the more tech we go, the less we value our money.⁴ Remember our friend Alan Wolberg? Well he and Angie O’Leary from RBC have this to say:

Alan and Angie have found that as transactions become a tap of a card or smartphone, instead of handing over physical cash money, we lose our ability to measure value and keep track of how much we’re actually spending. Sure, we could just open up our banking app, but who does that on the regular? It’s way too terrifying.⁴

No really. At least here in Canada, the internet has actually helped us save more. So, while more than half of Americans (57 percent) have less than $1,000 in savings, and more than a third have nothing saved at all, us Canadians are a little better at it. On average, we’ve got around $1,000 in savings per person and 69% of us have additional emergency savings to cover any unexpected costs. And and and, Canadians aged 18-34 are even better at saving than the rest of us—70% of them already have enough money saved to cover two months of living.⁹

How is that possible? Well, it turns out that technology has made saving easier. We can now automatically deposit our hard-earned money into our savings accounts and there are a ridiculous number of apps that help us budget, track our spending and check-in on our financial situation.

But ya’ know, that doesn’t necessarily mean we all pay attention. Even with all that good news, good old Alan and Angie from RBC still claim that “Generally, people are not getting better at saving through technology; they're getting better at spending."

Well, let’s not get carried away. During the pandemic (we know, we just can’t seem to write an article without talking about the pandemic) the use of cash in everyday transactions declined, but using cash as a savings vehicle—probs stuffed into mattresses, sock drawers and safety deposit boxes—took off. We blame all the economic uncertainty. And that means that cash withdrawals actually rose during the early days of COVID-19 pandemic.¹⁰

The reason?

People, me included, tend to think cash is a thing of the past. But that’s not true just yet.

And we know, we know, “What about crypto?” you’re probably thinking. Well, you can read all about that in So is cryptocurrency a good idea or what?

Well that was a pretty bad transition. Anyway…

Remember this:

This probably isn’t all that surprising—as in, you probably have at least one subscription for something. Netflix? Prime? Diapers? Meal kits? An app or two? Games? Software? Music? We can subscribe to pretty much anything these days. And, let’s be honest, they make life pretty convenient. Who doesn’t like having Harry Potter one through eight on demand?! But but but, they’re also really easy to sign up for and really, like really really easy to forget about. Aka, they help you spend your money without even thinking about it.

Last year the “subscription economy” (yes, it’s apparently a thing now) raked in $650 billion and by 2025 it’ll grow to around $1.5 trillion.¹¹ That’s not nothing. How do we account for that pretty epic growth? While, aside from the convenience:

And, as we all know, no one likes unsubscribing. It’s awkward and hard. Which is why over 85% of Canadians have at least one monthly subscription.¹²

So we got a little off-topic with the whole subscription thing, but it’s a pretty damn good example of how our relationship to money has changed. Technology has simultaneously made it easier for us to track and ignore our money. And that’s no small feat.

Wait. Did we just spend a whole article talking about our relationship to money without actually talking about how to talk about money? Huh. Apparently, Julie was on to something there.

A mad shout out to Julie, our VP of Marketing, for THE quote that inspired this article. And and and to Julien Poirier-Malo who managed, again, to adapt the article from English into français without killing the vibe. That takes some talent.