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…
When your spending is on autopilot, you’re making unconscious, habitual buying decisions.
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.
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.
“If you can’t buy it with cash, you probably can’t afford it anyway.” -Tommy Martin #quote
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.
Saying “NO” to buying something you don’t need 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.
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.