Three Tips From Sara On How To Fight Financial Process Automation

Sara F Gonzalez

Have you seen Google's demonstration of Duplex, their latest virtual assistant technology?

If you did, like me, you were undoubtedly both amazed... and afraid of the possibilities. In other words, Google is close to figuring out how to make it so that computers and robots can communicate with humans in a natural way, with the human being being completely unaware that they are interacting with a machine.

(And evidently, I wasn't the only one who was troubled by this idea, because Google swiftly added a clause to their policy indicating that their robots would self-identify as such.)

The fact is that we are speeding towards ever-increasing automation, and it is only recently that people have began to pause and consider if all of this automation, speed, and convenience is a desirable thing.

These are important things to consider as a community, as Charlotte families, and even for our own souls.

And, as I'll argue with you today, for the sake of our bank accounts.

But, before I go there, and while we're on the subject of wallets, the Supreme Court just overturned a 1992 federal ban prohibiting sports betting. As a result, state and federal treasuries are salivating at the prospect of all the new tax income that legalized sports gambling could bring.

The final score was 7-2. You're a winner if you were on it at -4.5.

 

<Groan>

Sorry, I couldn't help myself.

And, speaking of groan-worthy segues, resisting the steady avalanche of robot automation within your personal finances may prove to be a very good thing.

Here's what I'm talking about...

Three Tips From Sara F Gonzalez On How To Fight Financial Process Automation

“As our circle of knowledge expands, so does the circumference of darkness surrounding it.” – Albert Einstein  

What if we approached autopay in a different way?

What if we took a moment to think about the repercussions of so much convenience, not just in terms of terrifying robots invading our lives, but also in terms of what it might be doing to our wallets?

Small business owners and people with more complicated incomes in Charlotte are familiar with writing quarterly tax checks, and I feel they have a better understanding of what they are paying as a result.

In fact, I believe our country would be a different place if everyone was required to write a personal check and submit their taxes in this manner. I believe individuals would feel differently about their tax burden if they could see what they pay (or don't pay).

This is a recurring refrain among political analysts, but it has me wondering what it means for YOUR family...

In fact, part of the beauty of financial expert Dave Ramsey's "envelope approach" for family budgeting is that it does just that (whereby you place cash into specified envelopes, and pay only as much cash as remains in the envelope for different budget categories). Our commitments can be “automated away,” lulling us into financial slumber.

As a result, I'm now recommending that you REMOVE financial process automation from some of the checks you make each month. (This is in addition to the automated savings I mentioned earlier.)

Allow me to add a word of caution: the main danger with this method is that you may become overly focused on pinching pennies. I obviously advise sensible budgeting, but it's vital to realize that obsessing over money can divert your attention away from critical "risks" that are often worthwhile to take — such as starting that business, making a new investment, and so on. Don't let this strategy prohibit you from broadening your financial horizons.

So, for the sake of personal clarity, here are a few recommendations for what you might DE-automate:

1) Receive your paycheck in cash (rather than ACH) only once, or cash the entire amount when you receive it. Have you ever HOLDED ONE SCHEDULE'S WORTH OF MONEY before? It's difficult to grasp how much money you're bringing in until you have those stacks of $20 bills in your hands. I can assure you that seeing it in person rather than online makes it much more difficult to spend. It also hurts worse when you waste it.

2) Make a manual payment on your mortgage. Every time you write this big check, you'll feel the pain. It will affect how you think about the other bills you pay, so even if this is the only payment you remove from "auto-pay," you will be more frugal with your leftover dollars each month.

3) Only buy autos with cash. Wouldn't you wind up with a cheaper car if you had to pay cash? Probably. Just because a lot of people are used to setting up car loans and payments doesn't imply it's a good idea — in fact, it's one of the main characteristics of the "silent millionaires" (those who are getting ahead financially, even on relatively smaller salaries). Yes, your pride may suffer when you're not cruising through Charlotte in a 2018 Audi... However, taking into account the true expense of that ego-boosting vehicle does wonders for soothing your egoistic tendencies.

Paying in cash (or with a manual check) allows you to think about the following issues:

  • Is this ____ still WORTH it? 
  • Is there a way I can cut it down a bit? 
  • What’s the best way to pay for it right now? (c/c, check, cash?)  

Again, some of this may take only a few seconds, but the important is that you STOP to consider it. You don't get the "ping" every month with automation because it already does the thinking for you.

I'm confident you'll discover a LOT more about the financial "you" this way than you would otherwise.

It all boils down to paying closer attention.

And it's something we could all use more of in our lives.

Warmly,

Sara F Gonzalez

(704) 599-3355

Kohari & Gonzalez PLLC

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