Don’t get me wrong, there are some things you should automate with your financial life. However, there are plenty of areas where automation might not be the best choice.
For the month of February, I attempted to unatuomate my finances by switching my spending from credit cards to cash. During this trial, I have discovered bad habits that I was previously unaware of.
One thing I never realized was how much I was going to the grocery store. Even though I kept a budget, it still felt like I only went to the store once a week. Now, when I’m taking money out of the envelope on a Wednesday evening, I think twice.
The purpose of unautomating your finances, even if it’s just for a trial period is to give yourself greater awareness. You’ll be surprised by how many unconscious decisions a day you make about money.
Here are 8 ways to start unautomating.
- Switch Method of Payment – Whatever form of payment you typically use, switch. Options include going from credit card to cash, cash to credit card, cash to all checks, etc…
- Switch Budgeting Method – There are many different methods to try. You can use a service like Mint, try the envelope budgeting system, go old school and attempt to do it by hand, etc… There is no right or wrong way, just make sure you account for every dollar that comes in and out.
- Read Everything – For one month, review every financial statement with a fine tooth comb. Read your entire credit card statement including the small print. Dissect your monthly portfolio statement. Spend a few hours just looking at your benefits package. If you’re anything like me, I quickly toss things like this aside.
- Set A Short-Term BHAG – BHAG stands for Big Hairy Audacious Goal. If you want to unautomate your finances, set a short-term BHAG. Anything is possible. Examples include trying to live off of a $100 food budget for one month, not driving for 30 days, list one thing a day on eBay, drinking nothing but water, etc…
- Create A Money Journal – At the end of each day, write down how many times you thought about money that day. You will be amazed at how often we don’t make very conscious decisions with our money.
- Talk About Money With Family and Friends – An easy way to bring up money with anyone is to just ask for their advice. Even if they don’t have any great advice, you can still start a conversation. Don’t be afraid to talk about money, there is a lot to learn from other people. Learning from someones mistakes, is just as good as learning from their successes.
- Find A Mentor or Create A Support Group – Find a support group or mentor, that you can talk to about money. Create a monthly meeting with your friends where you review finances and goals together. Go to someone whose lifestyle you respect and ask if you can buy them a cup of coffee once a month while you talk about money.
- Read About An Unfamiliar Financial Topic – Take the time to learn something new about money. If you don’t know a lot about taxes, pick up a book. (While I was studying for the CFP® exam, I’m not afraid to admit that I read Taxes 2008 For Dummies because I knew my weakness was taxes). The key is to open up your mind to something new.
The price you pay for automating your finances is awareness. For some areas like investing, this is great. For others like spending, not so great.
Experiment with different methods of managing your money. Implement the system that works best for you.
If you have any unconventional ways you manage your money, please let me know in the comments. Also, in what ways do you attempt to become more aware about money?