The internet is a tool of unprecedented power. Never before has so much information been at your fingertips, nor has there ever been such easy access to so many potentially life-changing tools. The flip side of the internet as a resource is that – depending on how you use it – it can have a negative impact on your quality of life and actively work to push you farther from your goals.

Nowhere is this truer than in your financial life. Used advantageously, the internet can help put you on the fast track to achieving your money goals. However, being online can also make it easier to engage in counterproductive behaviors that, in the end, cause more frustration than joy.

As you read the uses of the internet that follow, look for ways the habits described resemble your situation. Nothing here is intended to pass judgment on how you or anyone else spends their online time. Ultimately, you’ll decide what works best for your needs and lifestyle. But it can’t hurt to take these ideas about the impact of your online activity as food for thought.

Good: Understanding your options

Let’s say you’ve got a child who might like to pursue higher education at some point in the future. They’re only five years old, but you’d like to start saving for their college costs. If this were the pre-internet days, you might gather information from other parents about how to accrue an educational nest egg for your child. You’d have to hope the information you were given was accurate and comprehensive. Alternatively, you could go to a bookstore and search for a book on saving for a child’s college expenses. But if the information in the book is out-of-date, you might be making a critical misstep. With the internet, you can quickly seek out the most current details while ensuring the information comes from trusted sources.

Bad: Decision fatigue

Scrolling through your favorite social media app or site can feel like a useful distraction when the pressures of the day feel overwhelming. But this kind of activity can have a downside. Scientists who study how humans interact with the internet have identified a tendency they call “decision fatigue.” The idea is that when you spend a significant amount of time each day online, you’re potentially making hundreds of little decisions on which sites or apps to visit, whose posts you’ll like, which games to play, whose texts you’ll respond to, etc. Eventually, your brain becomes exhausted from making all these choices.

This can impact your finances in a few different ways. First, when it comes time to make spending choices, you may find yourself making decisions that are the easiest instead of taking the time to weigh your options. For example, you might order food through a delivery app instead of cooking because the former feels less mentally taxing. Do this enough times, and it can balloon your monthly food costs.

Second, information overload can lead to procrastination on critical financial decisions. Consider this example: your taxes are due, and you have to decide whether to do them yourself using software or hire a tax professional. On the face of it, that usually wouldn’t be an agonizing choice. But if your brain has been making little digital choices all day, you might be putting off making more significant choices because of decision fatigue.

Good: Tools for efficiency

When it comes to your money, “set it and forget it” is one of the greatest beauties of the internet. You can decide you want to put away more for retirement, and in just a few minutes, go online and raise the percentage you have taken out of your paycheck for your golden years. In the time it takes you to make a sandwich, you can have an enormous positive impact on your future – and it’s all because of the internet. Or consider roundup apps that put a little bit of money from each purchase you make into savings without having to even take the time to make a transaction. You can put some serious work into building an emergency savings account with little effort.
If you’re like most people, you only have a little extra time to devote to managing your money. There are myriad ways technology can help you automate your finances so that you come out ahead without having to remember to practice good habits.

Bad: Keeping up with the digital Joneses

Not many social media influencers and celebrities rose to stardom based on content about making frugal and prudent financial decisions. The norm is to use a glamorous and luxurious lifestyle to seduce followers. Because of this, it’s easy to feel like your life is somehow less than when compared to a carefully curated and often fictionalized view of “success” by popular social media personalities.

Due to the omnipresence of high-end living in social media feeds, it can start to feel like you only have a good quality of life if you’re taking vacations to the hottest resorts or sporting the trendiest fashion regularly. Spending money to have the latest and greatest can be doubly alluring because it allows you to experience an ego boost from posting your own social media pictures of your newly acquired expensive item or fabulous vacation. While it’s okay to use your money to buy things and experiences you feel will improve your life, try to do so within the parameters of a monthly figure you’ve calculated to fit your overall financial plan.

Good: Identity theft protection

This one might seem a bit counterintuitive at first. You might be under the impression that being online puts you at greater risk of having your information tampered with. While to a certain extent that is true, being online also gives you access to powerful tools for guarding against intrusions into your personal data. By regularly reviewing your checking and credit card transactions and your credit reports online, you can catch illegal activity and respond quickly and decisively. Furthermore, a few monthly search engine queries make staying abreast of fraudsters’ latest techniques much more accessible.

Bad: Fad investing

The internet is full of many great tutorials and pieces of explainer content for getting to the heart of complicated financial issues. But at the same time, there are a whole lot of people on the internet peddling opinions that are more focused on making money for them instead of you. Investment advice is a prime example. Take the example of digital currencies. There were thousands of internet talking heads yelling at the top of their lungs about missing out on the opportunity of a lifetime if you weren’t putting all your money into the same digital currency they were investing in. Despite what the internet “experts” tell you, the bottom line is that investing hasn’t changed that much over the years. Yes, a few people will make a lot of money in alternative investment vehicles. Still, your safest option will typically be with the kinds of investments that have been around for a while and have a proven track record of consistently positive performance.

Good: Comparison shopping

Sometimes, you don’t know what you don’t know. For example, if you’re looking to buy a used car, you might have compiled a list of criteria you plan to use in making your choice: passenger size, fuel efficiency, safety rating, etc. While online shopping makes weighing the relative merits of different models and individual vehicles simple, it can alert you to factors you may not have even considered. To be a truly informed shopper, leverage the power of reviews to give you an inside look at the experience of people who have used the item – in this example, a vehicle – you’re considering buying. This can help you uncover potential problems you might not have considered.

Bad: Impulse purchases

The internet speeds up life, sometimes for the positive and sometimes for the negative. Have you ever quickly purchased a household item online only to discover that you already had it tucked away in a cupboard? This, of course, isn’t the end of the world. However, it does speak to the fact that fast purchases aren’t always the best. And sometimes, the purchase carries a higher price tag than a few toothpaste tubes.

Consider implementing a “sleep on it” rule for online purchases. Oddly, a relatively small percentage of the things you buy on the internet are needed immediately. By building a buffer time into your spending decisions, you can give yourself the opportunity to exercise greater prudence.

It can be difficult to fully grasp the impact of your actions online while you’re online. Giving yourself time to unplug and think about how you use your time on the internet provides valuable perspective on the impact on your financial well-being.

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