We already know that financial institutions;
- Want our money
- Want as much of it as they can get
What else could they possibly want in addition?
RULE NUMBER THREE
3. Give them our money on a regular basis = systematically, without thinking about whether or not it’s a wise decision.
. . . Ever used one of the newer financial industry favorites called ‘autodraft’‘? Do you suppose that the concept of autodraft really came about to help consumers? Or would it make more sense that the financial industry spent some money on consumer research and discovered that people are less likely to stop paying for something if they first; already chose to purchase once, and second; decided to repeat the purchase one time (signing up for autodraft) as opposed to multiple times (the consumer physically receives and pays an invoice each time).
Let me ask you another question. How many times have you looked at your bank statement only to discover that a company had charged you for something that either wasn’t wanted, or a purchase that had been canceled or should have been cancelled? It may not be that often if you diligently monitor your account. But it happens – a little at a time.
Banks make paying them very easy and attractive. They never mention the time spent trying to correct the errors we find.
Banks love Auto-draft because it removes decision-making from the action of spending.
Banks love direct debit because it allows them to collect interest sooner – no waiting for a check to arrive. Zero processing time.
Debit cards – how much easier is it to spend money if you don’t have to go get dollar bills and have them in your hand? All of a sudden, impulse shopping is possible. How much easier is it to live without a budget or spending guideline if you aren’t limited to the bills in your wallet?
Here is my advice. The only time you pay for things by electronic means is when you have already made the decision to do so for a long period of time. An example would be paying your mortgage via electronic draft. You’ve already decided that years of payments (for an appreciating asset) is acceptable and in fact, in your best interest, so make it easy and pay for it electronically.
Then, unless you’ve decided to spend the money, try not to give in to impulse. Think about your purchase a day or two. If you really need ‘fun money’ and ‘impulsivity’ in your financial life, then give yourself a hard cash allowance and spend that whenever and on whatever you decide.
Just because the store is ‘Open’ doesn’t mean you have to go in. Window shopping can be fun too.