I’m a Financial Coach: Here’s Why ‘Paper Planning’ Is Best for Building Wealth

New financial technologies such as money and investing apps have made it easier to stay informed and in control of your finances. With the dawn of AI, algorithms can even inform you about financial best practices for saving and investing.

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However, the most effective way to build wealth might not be digital — but instead on paper. Alaina Fingal, a financial coach and founder of The Organized Money, explained to CNBC that people may be better off organizing their finances the old-fashioned way.

“I show people how to save, budget, and build wealth by organizing their life, and my main tool is paper planning,” Fingal said.

Credit.com reported that about 27% of Americans don’t think they need a budget. Although, if they try the pen-and-paper method, they might be surprised by how much it can help.

The act of writing down your finances allows you to visualize your money on a day-to-day basis. Since most people aren’t checking their credit card accounts daily to track each swipe, carrying around a small notebook and jotting down your daily expenses can be a more effective way to see how much you’re spending.

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4 Reasons Why Pen-And-Paper Budgeting Can Be Effective

Here are four reasons why paper planning could be an effective tool for saving money and building wealth:

  1. You’ll recognize where you’re spending: By writing down your daily expenses, you’ll physically see how much and what you’re spending on each day. This will allow you to visualize your expenses and help you control your spending so that you stay within your set budget.
  2. You can prevent impulse spending: Writing out a figure of how much you have to spend each day can help you prevent overspending. For example, if you can only spend $50 today and mark it at the top of a page, you can deduct each of your daily expenses from the $50. This way you’ll be sure not to go over $50. If you’re just swiping your debit or credit card without checking each charge, you could quickly go over your daily limit.
  3. You’ll eliminate digital distractions: Your smartphone, tablet, and computer make life’s tasks easier, faster, and more efficient in many cases. However, it’s very easy to get distracted by notifications and incoming messages. If you’re using your financial apps to check your expenses and organize your budget, you might easily switch to another app that’s sending you a notification and lose track of what you are doing. Using the pen-and-paper method eliminates digital distractions and helps keep you on track.
  4. You’ll know how much you have left to save and invest: As mentioned, using the pen-and-paper method allows you to visualize your expenses. If you jot down how much money you have to spend for the month at the top of the page and deduct from that total as you go, you’ll know exactly how much is left at the end of the month. You can then take that extra cash and put it in a high-yield savings account or invest it in the stock market.

The pen-and-paper method might seem outdated, but if used effectively it can help put you on track toward long-term financial success.

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This article originally appeared on GOBankingRates.com: I’m a Financial Coach: Here’s Why ‘Paper Planning’ Is Best for Building Wealth

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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