From Podcast #172, Put Your Bills on Auto Pilot, the one in which Jesse reinforces the importance of asking, “Why?” and continues to champion the more simple option.
Now, we’re talking about simplicity; we’re taking another stroll down Simplicity Lane. It’s a straight lane—not a lot of curves, not a lot to look at, super-simple. BUT it gets you to your destination quickly.
I love engagement. We talk about awareness a lot, the fact that we want you engaged with your budget. We don’t want you a slave to the budget; we want you engaging in a really healthy debate with your budget.
Simple is the Goal
Knowing that, it might surprise you that I love the idea of putting your bills on auto-pilot. Wait—what? I just said auto-pilot, and we don’t really like auto-pilot in a lot of ways. But think about it this way: we’re going for simplicity. We want you to manage your money in as little time as possible for the maximum effect, maximum gain required/needed/desired.
Some of you are clawing your way out of past mistakes and you really are looking to make some big gains. Some of you are doing just fine and you’re just kind of cruising and you use YNAB as a way to keep a good rhythm on things, keep the communication channels open if you’re sharing finances. Anyone, in any situation using YNAB, I think it’s okay to put your bills on auto-pilot, given this caveat: you want to question your spending.
Start and End with Why
You don’t just want to automatically say, “I am going to spend less because less spending is fundamentally better.” I don’t think that’s the case—it’s way too judgmental. I want you to question your spending to make sure that it lines up with Rule One, where you’ve prioritized and you’ve gone to the “why” that we talked about with Carl Richards back with The One Page Financial Plan.
It’s all about getting to the real why. You’re going to do that? OK – why? You’re saying, “Why? Why is money important to me? What is important to me right now?” You’re getting to that root and that is what will allow you to really question your spending.
So, again, you do not reduce spending for its own sake. You reduce spending because you’d like to deploy that money elsewhere, in a more productive fashion, as it relates to your priorities.
With the bills on auto-pilot, I do want you questioning those bills, but when you think about it, you have already questioned those expenses: you’ve worked through the budget, you’ve decided that the cable subscription is worth it, the Netflix subscription is worth it, some video game subscription, you’ve decided that’s worth it or the monthly membership to your golf club is worth it (I hate giving examples because it sounds like I’m judging). Whatever it is, you’ve already done the questioning, you’ve already said, “Hey, I’m aware of this bill and I want to make it happen, I want to spend my money this way.”
The awareness piece has already been taken care of. You’ve questioned it; it’s aligned with your values. You don’t necessarily need or want to spend the time actually cutting the check, actually sitting down and entering that bill and paying it. So, don’t.
Once you’ve been able to get to a point where your money is about 30 days old—where you’re spending money you earned about 30 days ago—when you’ve gotten to that point, the money is there when the bill arrives instead of the bill arriving and having to wait for the money. So, you’re following Rule Four, the money is there, and when the bill comes, there is no other part of the process that is necessary.
One Less Thing
So, just make the bills go on auto-pilot. And then, every once in a while, as you’re working through your budget, you question those bills. Is the golf thing still worth it to me? Is the subscription to Woodworker Magazine still worth it to me? Whatever it is. The questioning, the making sure that it’s lined up with your values, that’s all great.
And then the auto-pay, that’s all there because there is no value in spending more time cutting the check. The only time that’s valuable is if you hadn’t thought about the spending already and you realized in that moment of awareness, “Why am I doing this?” and you change your behavior. So, if that’s the case, just auto-pilot everything you possibly can and you’ll be well on your way.
Until next time, follow YNAB’s four rules and you will win financially. You’ve never budgeted like this.
For more about how to stop living paycheck-to-paycheck, get out of debt and save more money, faster — subscribe to the You Need A Budget podcast today!