9 Signs That Your Spending Is On Autopilot

9 Signs That Your Spending is on Autopilot

9 Signs That Your Spending Is On Autopilot

9 Signs That Your Spending Is On Autopilot

How do you feel about your money? Is a source of anxiety or frustration? Kind of like you’re going through the motions each day instead of really living a life you love? Have you ever glanced at your bank account, taken aback? Is your spending on autopilot?

This lack of financial confidence may stem from spending on autopilot. That’s the process of making unconscious, habitual buying decisions. And they don’t usually align with how you want to save and spend. If that’s you, you’re not alone.

We are all guilty of putting spending on autopilot. Harvard University psychologists estimate that we are on autopilot 47% of the time. As someone that coaches people on how to start living life intentionally, here’s the best way that I can describe this phenomenon…

 

 

You wake up in the morning and go about your usual morning routine. You get in your car and start the journey to work. You’re on the road, put on your favorite morning station or podcast. You make a pit stop into your favorite coffee shop and pick up your “usual” —a breakfast sandwich and coffee. This is your routine. Life is good. You are very happy and ready to take on whatever gets thrown at you today. You reach over to take that last bite of your sandwich only to discover… it’s gone. Did it fall onto the floor or did you finish it? And just like that you’re rolling into the parking lot at work.

Over millions of years, our brains have become efficient at making simple decisions. We don’t even realize we’re making them. In a given day, it’s estimated that we make around 35,000 decisions. Like computers, we run hundreds of processes in the background. There’s too much going on and our brains can’t possibly take the time to consider them all. Just imagine what life would be like if you had to decide to breathe. There would be very little else you could do. In an effort to save resources, your brain automatically kicks into autopilot. It will run these decisions in the background to help make your life easier.

This is how habitual spending starts —by making automatic buying decisions. And it’s a problem. When your spending is on autopilot, you can’t prioritize your financial goals. That routine of buying coffee and breakfast on the way to work each morning can add up to costing you a beach vacation home.

Living your life with your money on autopilot will not only keep you from achieving your financial goals, it’ll keep you from creating happiness.

 

Here are 9 signs you’re spending is on autopilot:

 

1. Spending causes anxiety.

If you get anxiety from normal purchases, it can be because you lack clarity around your money. You might have anxiety because you don’t know if this transaction will go through. You don’t want to make another financial mistake, so you try to avoid it altogether. Where this starts to become a problem is when you’re not buying things that you actually need.

Let’s assume you can get dog food is ten dollars cheaper online. You add it to cart, but never check out. In a few days, you’re going to wake up with no food for your little guy, forcing you to make a run to the grocery store. Now you’re paying more for a smaller bag and have to take time out of your morning.

By putting off the decision to buy, you put yourself in the position of having to pay more later.

 

 

2. Your spending habits become routine

Every three months (or new season), I like to go on a financial detox. I’m not special. I’m susceptible to picking up a spending habit or two as the next person. Those habits shortly start to become routine and I need to make a decision. Do I start budgeting for this new routine or quit it altogether? Remember that story above about the coffee and breakfast to go every morning? I actually did that!

This was my way of re-balancing my financial goals. I would take the money I was spending and redirect it towards a financial goal.

You can try this money cleanse for free. I call it UNBUDGETING —Because Budgets Don’t Work. Download the instructions and worksheets for free.

 

3. You buy things without thinking

Do you buy things on impulse? That means you see it, you like it, you have to have it. And you don’t give any consideration about how this affects other areas of your life? If so, your money was on autopilot.

There is so much demand for your financial attention. In effort to increase their wallet share, retailers model their businesses with impulse buying in mind. They strategically place their most profitable and desirable products in specific spots in their stores. Maybe you saw a pair of shoes or a new outfit and placed it in your cart.

About those BOGO items… Buy One Get One (BOGO) items are impulse sales. Retailers know that sale price is the biggest factor for impulse purchases. In fact, sale price affects almost 90 percent of your impulse purchases. These psychological pricing strategies make it difficult to say no.

 

4. You are spending a lot of time “window shopping” online.

I don’t see anything wrong with window shopping —in real life. You can go to the mall, see some things that you like and walk out of the store having not bought anything. Nobody is going to follow you around the rest of your trip at the mall. Nobody’s going to follow you to you car, or back home, or sit with you at your desk at work. That would be unreal.

 

5. You don’t know what’s in the bank

According to the Consumer Financial Protection Bureau (CFPB), we’ve paid a total of $50 billion in overdraft fees as a nation. Studies show that frequent over drafters typically pay $450 more in fees.

As we move forward into this digital age, let’s keep a tab of what we have in the bank. With that much in overdraft fees, it’s pretty apparent that many of us have our money on autopilot. We’re just writing checks and swiping plastic without knowing it will clear. You can’t develop financial strength and confidence doing that.

 

6. You can’t leave your credit card at home

I’ll be honest. I don’t use credit cards or debit cards often. Instead, I use a cash envelope budgeting system. I pretty much use cash for everything. I only use my debit and credit cards for business expenses, shopping online, or putting gas in the car.

I have complete control over my spending with cash. There’s no chance for overspending. I only bring enough cash for what I budgeted for. There’s not much room in the budget to add random items into my shopping cart.

“What about my credit card perks!?”

If you’re not paying off you card in full each month, the perks aren’t worth it. Be very cautious of reward programs. They give you permission to put their money on autopilot. You justify purchases by saying, “I’m getting points.”

If you want more control over your money, try using an envelope system. People that do spend 12 to 18 percent less per shopping trip than those paying by credit or debit card. Try it just for groceries at first. Trust me, you’ll feel like a bad@ss. I do.

 

 

7. You’re not making meaningful progress with your financial goals.

Q: Why do so many people fail in their financial goals?

A: We never only have one financial goal to work towards.

We all have multiple financial goals in life. We want to plan an amazing wedding, buy a home, start a family, travel more, send the kids off to college, and retire early.

But, each goal is competing for your financial attention. And at the end of each month, we are faced with a choice:

  • Tuck away some money; or
  • Spend it

And what do we always do? We spend it. Some of us don’t even have the option to save or spend, we already spent it.

There are two reasons why people are not making progress with their financial goals. They’re either not making enough money to make ends meet or they’re spending it. If that’s you, you might want to consider trying out UNBUDGETING™. It will help you free up some cash at the end of the month. And it’s free.

 

8. You say “yes” more than you say “no”

I used to say “yes” a lot more than I do today. Today, I have to be very guarded with the time and resources I have. I don’t have enough time, money, and energy to be everything to everyone. And in order for me to make meaningful progress on the goals that matter most to me, I needed to learn how to say “no”. This included having to say “no” —even to my wife. (Sorry babes)

And guess what I learned? Saying “no” actually increased my productivity and mental health.

The next time you feel caught between wanting to make someone else happy and wanting to make yourself happy, just remember: Saying “no” to whatever they are asking of you is just another way of saying “YES” to what you truly want to commit yourself to.

 

 

9. You’re not living a life you love.

It’s pretty easy to tell that you’re not living a life you love. Each day becomes a struggle. You’re not motivated or excited to take action on long held goals.

Most goals have a financial component to them. If your not hitting goals that are important to you, it could be because your spending is on autopilot.

Sure, you can set a bunch of to-dos. You can fill your calendar and set up reminders. You can do all that and still, never make meaningful progress towards a life you love.

Here’s why.

It’s because you’re not emotionally charging your goals. It’s why New Year’s Resolutions have a shelf life of two weeks.

If you’re not living a life you love, start creating a daily visualization practice. Visualize your goal —where you are today, the struggle you need to endure, and the prize for succeeding. This isn’t a gimmick about visualizing the success. The success of the house you want, being free of your student loans, being able to take that trip to Brazil. No.

The key to success is in visualizing the struggle.

Imagine that new outfit, gadget or toy you want for your child. Feel that pain of wanting to buy. I know it all too well. Visualize that struggle. Live in that moment and then see yourself say, “NO”.

That’s where the emotional anchor sets in for making your goal important. Then, yes, visualize yourself enjoying your success.

Creating a life you love requires becoming clear about your financial goals and working through the steps to reverse engineer that success. The first step is getting your money out of autopilot mode. It’s freeing up cash at the end of the month and directing it towards what matters most to you.

Each new step you’ll undertake to create the life you love will motivate and inspire you to press on to the next step.

 

 

I want to hear from you

Do you have a pressing question. If so you can drop it in the comments below or ask me privately. If it’s good enough, I’ll answer it and mention you on my next Q&A Tuesday on TommyTV.

 

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8 Questions for Hiring Student Loan Repayment Help

Student loans can make our financial life a little more complicated. Especially when you have over $100,000 in student debt. Sooner or later you’re going to find that you need help with student loan repayment strategies.

Most likely, your balance isn’t dropping as fast as you’d like —or worse, it’s going up. We go through major life transitions like getting married and starting a family.

How do all these events affect our student loan repayment? Who do you turn to with questions about your student loans? There are so many so called “student loan experts” online.

While I am a financial planner that specializes in professionals, I’m not everyone’s cup of tea. And I don’t try to be. If I’m going to invest my time into creating a plan for a client, I want them to stick with me for the long-term.

To help you identify a planner or advisor that’s right for you, I put together some questions for you to ask.

Here are 8 Questions for Hiring Student Loan Repayment Help:

 

1. Do you provide financial advice?

I learned that many student loan planners don’t actually provide financial advice with student loan repayment.

Surprising, right? They only serve in an “educational capacity.”

Hiring Student Loan Repayment Help

How it’s possible to deliver valuable advice on student loans in an educational capacity?

 That means the advice isn’t tailored to your unique financial circumstances. That defeats the whole purpose of paying for student loan repayment help.

 In my financial practice, we run many financial calculations. We’re trying to identify the best student loan repayment strategy for our clients.

In my firm, Clear Path Financial Planning, we create and evaluate multiple scenarios based on each of our client’s unique situations. If forgiveness is likely, we’ll attempt to maximize that benefit. We calculate the projected tax bill and provide a savings strategy to pay it.

Isn’t the reason why you hire a student loan repayment professional is for financial advice? Make your planner work for their money. Ask for financial comparisons of all your repayment options.

After mystery shopping a few student loan planners, I’m starting to see a trend. Many have conflict of interests. And this leads us to Question No. 2.

 

2. How do you get paid? Are you compensated through third party advertisers?

As direct as the question may be, it’s very important to know the answer. Conflict of interests are present in any business relationship. You want to be aware of them if they do exist.

If you feel the question is too confrontational, it’s possible to avoid the question. You can always dig through their website for a “Disclosure” statement. If the planner accepts affiliate money from advertisers, it will mention it there.

Hiring Student Loan Repayment Help

Why is this a problem? Money influences people, even those with good intentions. There’s no way of knowing why a recommendation is being made.

Student loan blogs are very helpful but just educational. The ultimate goal of the blog is to get you to refinance through an affiliate that will pay them for the traffic. Be cautious of anyone that quotes interest rates….

This isn’t to say that affiliate marketing planners don’t offer good advice. It’s just draining having to question their motive.

 

3. What deliverable can I expect?

Nothing ruins a relationship more than unmet expectations. Before you hire your planner, make sure that you share your expectations with them. And know exactly what you are paying for.

If you’re expecting a detailed financial plan with graphs and charts that compare all your repayment options, make sure that your planner will deliver that. I have mystery shopped a number of these planners. Many don’t have access to sophisticated financial software. Instead they use spreadsheets that they’ve created.

Spreadsheets can be problematic. Especially if the planner created it or worst —someone else. It can be difficult to illustrate and compare future scenarios in a spreadsheet.

Also, student loan legislation and tax laws are constantly changing. Have you ever tried creating or updating complex formulas in Microsoft Excel? Not all errors result in a ERROR: @#$%^^. Small errors can result in undetectable changes in projections. That means the math is wrong.

I like spreadsheets. They’re great tools but don’t make for a great financial plans. Not everybody wants to see tables upon table of numbers projecting out over 25 years. Give me a financial plan with colorful illustrations. I want to see the financial impact of one student loan repayment strategy over another.

 

4. How Long Will It Take to Complete This Project?

It’s also important to establish expectations around the process and communication.

If you’re waiting on this student loan repayment analysis to determine how to file your taxes, share that. The planner will have to run all repayment options as filing jointly and separately. That can take some time.

Also, not everybody communicates the same way. I find that some people don’t respond to phone calls and voice messages. But they’ll respond to a text message or email faster.

It’s important that if you or your planner expect a speedy response, that it’s clearly communicated.

 

5. What other services do you provide?

While your student loans might be top of mind, it’s only one area of your financial life. Start thinking about your student loans as part of your overall financial strategy.

Thinking beyond today is the only way to create a tomorrow you love.

It’s important that your planner can add value beyond this student loan analysis.

A financial planner will not only prepare a financial plan for your student loans. They’ll also create a savings plan strategy. They’ll help you build your emergency and vacation funds. If you take a financial hit, you’ll have the comfort of knowing you have a cash cushion to break your fall.

 Hiring Student Loan Repayment Help

If you’re going to invest the time and money into a student loan plan, why not ensure you can keep the it going if you want.

6. What kind of clients do you specialize in?

Good financial planners or advisors like to work within a specific niche. This allows them to become the experts in that field.

Many planners that focus on retirement planning and investment management are generalists. They try to work with anyone with money and usually underwhelm their clients. I happen to like working with both public- and private-interest lawyers. They have varied career paths and wide ranges of income. It’s fun to work and socialize with them.

While retirement is important, you’re most likely not planning to retire anytime soon. Find a financial planner that can relate to your stage in life and takes the time to understand you.

 

7. Do they ask hard questions?

What makes a good financial planner… well, good? Outside of technical knowledge, they ask really good questions.

They ask questions like:

  • Why is money important to you?

  • Why do you spend the way you do?

  • If money wasn’t an issue, what would you do differently?

This shows that the financial planner really wants to know what makes you tick.

These are just a few of my favorite questions. The answers don’t even matter. I’ll throw them away and ask deeper and more meaningful ones.

Questions like these help uncover your financial values —or more accurately, your life values. The best way for you to pay down your student loans, save and invest should be based on your own goals and values. Not your friend’s or anyone else’s goals or values.

A good financial planner will use those answers as a starting point to discover how you really want to spend both your time and money (and spend your time in pursuit of more money, as the case may be).

Learn to judge the advisors in your life by the questions they ask.

8. Are they committed to my success?

“What would have to happen next year or three years from now for you to look back to today and say this was absolutely worthwhile?”

This is my favorite question to ask potential new clients. It may even be my secret sauce. The question is designed to have someone look at their life and identify what needs to change to be happy.

I’m going to take that answer and reverse engineer it into first year agenda for this client. I’m committed to their success.

Find a financial planner that looks ahead to the future. These are the planners that will be more proactive in your life. They’ll help give you direction and that’s what’s going to keep you happy long-term.

The ones that don’t have an agenda only reach out but once a year.

 

9. What’s your refund policy?

Sometimes life happens. It’s best to know what the terms and conditions for working with this planner.

You might pay for a service only to discover that you need to postpone or cancel the project. A family member could fall ill and you might need to be there for them.

If this happens, it’s likely that your planner may have to refund you. Would you get a full or partial refund?

 

I want to hear from you

Do you have any student loan questions? If so you can drop it in the comments below or ask me privately. If it’s good enough, I’ll answer it and mention you on my next Q&A Tuesday on TommyTV.

 

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