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Your Guide to the Latest Digital Money Tools​

When to use online apps and when traditional transaction methods may be best​

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Chris Gash

​Remember being nervous about getting cash from an ATM rather than from a teller? Fast-forward a few decades: For every financial task, there is a digital do-it-yourself tool that supposedly makes it easier, faster, cheaper or safer. But is that really true? Here’s what you need to know about the most common and popular online money tools.​

Task: Paying another person

Tool: Money transfer apps

How they work: Venmo, PayPal, Apple Pay and other “peer-to-peer” payment apps store your credit card or bank information and then let you send or receive payments from others who also have an account on that platform. Some stores now accept payments via these apps as well, although fees may apply. You can also use these tools on a computer to send or receive money — but again, only to those who have an account with the same service you use.

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Are they safe? Some of these apps keep your money safe by “tokenizing” sensitive information, which means they replace your credit card or bank card number with a different, unique code, protecting your account info from potential hackers. Others may use bank-level encryption to protect your information. These security features make money transfer apps “more secure than carrying around a bunch of cash,” says Tom Kamber, founder and executive director of Older Adults Technology Services (OATS) from AARP and its Senior Planet program, which provide personal tech training.

Tips: With so many money transfer apps to choose from, it’s best to “find out what your friends and family members are using so you can get peer support,” Kamber says. “Once you get used to one of them, the others are quite similar.” Also, be sure to go into the platform’s settings to see that your transactions are kept private. Some services will make this information viewable to other users unless you specifically change that privacy setting.

Task: Paying your bills

Tool: Online payments

How they work: Utility companies, doctor offices and other ongoing service providers often offer an option to pay your bill online via their websites instead of mailing in a check. Just log in with your credentials and enter your credit or debit card information. This can be useful for occasional bills, such as for a doctor visit.

For recurring bills, such as your mortgage payment or utilities, a potentially easier method is to use the bill-paying service your bank provides on its website and mobile app. There, you can enter the provider’s info, which gets stored for future reference. When you need to pay a bill, just enter the amount and hit submit, and the money is drawn from your account and the payment sent.

Are they safe? If you use the provider’s website, be sure to check the URL before paying a bill online. It should contain a small padlock icon next to the site name, and the URL should begin with “https” rather than “http.” These elements signal that your information is encrypted — and therefore safe — as it passes from your browser over the internet to the website’s server.

Bank websites are highly secure, for obvious reasons. Plus, “when you pay bills online, there’s a digital record,” Kamber says. And there’s no risk of someone intercepting your paper check.

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Tips: With both options, you typically can set up automatic payments, too, which can be helpful if the amount is stable, such as for internet service or cable TV. “Just make sure there’s a little extra cushion in the bank account,” Kamber adds, to avoid overdrafts. Another advantage to online bill paying, especially when using your bank’s service, is that you can schedule the exact date a payment is made.

Task: Finding good deals

Tool: Shopping apps

How they work: Coupon-finding apps — like Ibotta, Honey and Coupon Sherpa — can help you get discounts at supermarkets and restaurants. Some also deliver cash back on purchases when you take an extra step, like scanning your receipts. For online shopping, you can download free software that applies available discount codes to your purchases. These include Capital One Shopping, Rakuten and Honey. “Every dollar saved is a dollar that can help extend our independence and quality of life,” Kamber says.

Are they safe? Make sure your smartphone or computer is set up for automatic system updates, which may contain security patches, as well as application updates, says Domenica Lee Crognale, a cybersecurity engineer and certified instructor with the SANS Institute. You want strong security because you might need to link the coupon app to a payment app, such as PayPal, to receive any cash-back rewards.

Tips: Each app works differently and may require a bit of practice, so it might help to download one that a friend or family member already uses. Kamber recommends researching at least three coupon-saving apps before choosing one.

Task: Reviewing your accounts

Tool: Digital statements

How they work: You can receive your monthly bills or account statements online instead of getting a paper copy in the mail. Doing so provides many conveniences, with all your statements in your email inbox, and it saves trees. (Estimates show you could save up to 6.6 pounds of paper a year by getting statements online.) Even better: Sign up for full online access to your accounts so you can review them whenever you wish.

Are they safe? Digital statements are considered safer than mailed statements, as it is far easier to steal from your physical mailbox than from your email account, which usually has several layers of protection, Kamber says.

Tips: To go paperless, log in to your account and update your preferences, or call the provider and ask to receive digital statements and bills. ​

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No matter your age or situation, unplanned expenses and debt can be difficult to manage. With just a few simple steps, AARP Money Map tools provide a clear plan of action and resources to get you started.​

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Task: Budgeting

Tool: Money management software

How they work: Some software products — such as from Mint or Quicken — offer a suite of financial services. You can create a budget, track your spending, plan your retirement funds, manage your taxes, and monitor your investments and bank account balances. Some are free, while others charge a subscription fee. One challenge: making sure you input all the appropriate data. If you skip using the tool for a few months, your info will be out of date and of limited use and accuracy.

Is it safe? There can be some risk because “you grant the provider access to multiple financial accounts,” says Anabel Perez, a financial services technology enabler for NovoPayment, which provides financial technology to companies. That means your banking accounts could be linked to this software, so “ensure you’re only giving that information to providers you trust,” Perez notes. Large, well-known companies are usually a good place to start, she adds, while free services you’ve never heard of or haven’t researched could be problematic

Tips: Because of the complexity and costs, this software is best only if you’re comfortable with using technology and you plan to use most of the features.​

Kim Porter has written for U.S. News & World Report, Time’s NextAdvisor and other media outlets.​​

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