Ah, procrastination. For many of us, it’s comforting. Some work better under pressure, and others just don’t want to be pushed out of their comfort zone.
In the latter case, procrastination can be extremely harmful. It’s easy to go through life living within the confines of what you’ve always known. For some, that might be living paycheck to paycheck. For others, that might be hoarding money for the ultimate rainy day.
Either way you put it, procrastination is often the enemy when talking about money. If you wait too long to save, you might not have enough to retire. If you wait too long to pay off debt, you may find yourself drowning in bills, with debt collectors hot on your trail.
I can definitely be a procrastinator in many aspects of my life, but when it comes to finance, I try not to be. I know the consequences of waiting, and I’m not a fan. Hopefully you won’t be after reading about them!
Why You Shouldn’t Procrastinate Paying Off Debt
First, simply paying the minimum on your debt isn’t the greatest strategy. Interest is going to end up eating most of your payments away, at least in the beginning. The longer you take to pay a loan off, the more expensive it becomes.
For example, if you refinanced your student loan from a 10 year repayment plan to a 20 year repayment plan, your monthly payment may be lower, but because you’ll be making more payments, it will actually cost you more.
That said, not paying at all is even worse.
You can’t put your head in the sand and ignore the bills coming your way, or else you’re going to have to face the consequences of a late payment. That could mean your credit score taking a hit, getting the late payment reported on your credit (which can stay for up to 7 years), losing access to credit, and having to pay an insane amount of fees.
That doesn’t sound like fun, does it? Didn’t think so. Having a delinquency or default on your credit is not a good way to kick your early financial years off.
Besides that, being in debt is stressful. That’s your money being accounted for before you even get paid. Wouldn’t it be nice to have the freedom to decide where you put your money?
No matter how many people around you are in debt, it’s not normal to have. Leverage can be good in some cases, but not when buying material items we can do without. It’s much better to create a plan to save, pay off debt, and have money leftover for the things we enjoy in life.
Why You Shouldn’t Procrastinate Starting to Save
An emergency fund is a valuable thing to have, even if you’re in debt. That’s because if something major were to go wrong, you wouldn’t have to charge it. When getting out of debt, the last thing you want to do is add to your burden.
Beginning to save while paying off debt is one of the best things you can do to safeguard yourself from financial disaster. If you lose your job unexpectedly, or decide to make buying a house or starting a family a priority, then having savings will help make those goals a reality.
If you’re just getting started, at least try to save $500 to $1,000 in an emergency fund, or 3 months worth of expenses. Whatever makes you sleep better at night.
Why You Shouldn’t Procrastinate on Creating Good Financial Habits
The younger you are, the easier it is to establish good financial habits. As we all know, the older you get, the more “set in your ways” you get. It’s harder to form new habits and change your mindset and perspective on things.
Creating good habits now will stick with you the rest of your life. I consider myself pretty lucky in that my parents were a good example of how not to manage your money. I learned what I should be doing early on, and haven’t looked back. As a result, I’ve amassed a decent sized emergency fund, I’m happy with the little things in life, I think before pulling the trigger on any purchase, and I’ve avoided consumer debt like the plague.
That might sound overwhelming to you right now, but I developed these habits more than 10 years ago. I was the weird 11 year old stressing out about buying one piece of clothing at Kohl’s. So much so, I spent an hour in the store trying to make a decision, and drove my mom crazy. If you start today, with just one habit, you’ll be in a better place a week from now.
Why You Shouldn’t Procrastinate With Investing
We’ve touched on the topic of compound interest before, and that should honestly serve as your number one reason to not procrastinate when it comes to investing. By delaying your entry into the market, you’re potentially losing out on a lot of money.
Getting started at 25 and retiring at, say, 60, means your investments have 35 years to grow. That’s a long time! Unfortunately, if you don’t start saving until you’re 40, your investments only have 20 years to grow. Additionally, when you’re younger you can risk more, and you can put more money into stocks than bonds. As you age, it’s smart to invest a bit more conservatively, with more money in bonds. That means your earning potential is lessened.
Similarly, if you have a 401(k) or 403(b) available to you with matching contributions, and you’re not contributing, you’re losing out on free money.
How to be Proactive
Instead of procrastinating, why not be proactive instead? It’s better if you accept that your financial journey will be a long one. We’re not recommending you start saving a boat load every day, or that you send $1,000 off to your debt. It’s perfectly okay to start small. The point is to start.
You might not feel like you’re making a lot of progress, but consistent effort will pay off over time. Think back to the last time you said, “I wish I had started doing this sooner.” Maybe it was eating healthier, maybe it was exercising, maybe it was picking up a new hobby. Whatever it is, perhaps it required a lot of effort at first, but it’s routine now.
That’s where you want to get with your finances. You want to form great money habits so your financial success is almost on autopilot. You want to set up a plan to pay off any debt you might have, and to save for the future. You want to recognize the value in investing for your future.
Dedicate some time each week to improving one aspect of your financial situation. That could be something as small as saving $1 each day, or reading a blog post (like this one!) on money management.
You’ll be glad you did, as procrastinating only leads to stress. You can choose to live paycheck to paycheck with no breathing room in your budget, no savings to fall back on, and little to nothing to retire on, or you can get your financial life in shape and look forward to a secure financial future.
Have you ever procrastinated on your financial goals? Why or why not? Did you regret it?