Let’s be honest: spending money is more fun than saving it, at least in the short term. But as with all forms of procrastination, the delays always catch up to you.
There are a variety of ways to be a financial procrastinator. According to credit card advisory firm R.K. Hammer, consumers pay around $12 billion a year in credit card late fees alone. And a 2014 study from the National Institute on Retirement Security found that retirement savings in the U.S. are “dangerously low.” More than 90 percent of working households do not meet conservative retirement savings targets for their age and income.
While we know financial procrastination is common, don’t stress! The most important thing is getting back on track. Here are five simple steps you can take to combat financial procrastination and stay on track to reach your goals.
1. Acknowledge That It’s Never A Good Time
There is never going to be a “good” time to do what you need to do, whether it’s balancing a checkbook, paying a bill, or opening a retirement account. When your mind begins to wander down that familiar “I will do it later” path, ask yourself: “Why not do it now?” Accept that you will never want to take care of the “unfun” tasks. Don’t wait around for some mythical inspiration from above, because it’ll never arrive. There’s no time like the present!
2. Make Yourself Accountable To Others
You can solidify your resolve by making a public declaration of your intent. Public declarations are known to help people stick to health and fitness goals, and the same principle applies to financial goals. Of course, this doesn’t mean that you have to broadcast your financial figures on social media; simply vocalizing to friends and family that you’re going to create a budget or start saving for retirement holds you accountable. This will make your goals feel more legitimate, and procrastination will feel less acceptable.
3. Start Like Neil Armstrong: One Small Step…
Another effective anti-procrastination technique is to start small and set attainable goals. Research from the University of Chicago found that “the key step in getting things done is to get started.” When you have a daunting and unpleasant task in front of you (like organizing all your tax files) taking that initial step is the hardest, so make it a small one. Setting bite-sized goals prevents you from feeling overwhelmed. Once the ball is rolling, it won’t feel quite as painful to keep going—especially given that we usually anticipate things will be worse than they are. You also won’t want the effort you’ve already put in to go to waste!
4. Set Goals
It is also a good idea to set clear deadlines and/or timelines for all of your tasks. Structure, even when self-imposed, helps people stick to plans. And when it comes to your deadlines, the sooner the better. The same University of Chicago study also found that a task was more likely to be attempted if its deadline was viewed as coming up sometime soon, versus being due farther off in the future.
5. Reward Yourself!
When you set goals and meet your deadlines, this triggers a sense of achievement. You can further enhance this sense of achievement by giving yourself additional rewards, too. Open a savings account, then buy some ice cream. Spend 30 minutes balancing your portfolio, and then 30 minutes watching TV. Hit a retirement savings milestone, then treat yourself to a new watch. Positive reinforcement is a great way to keep procrastination at bay.
By getting started now, and doing a little bit each day, you may just find yourself tackling financial procrastination before you know it. Tools like FutureAdvisor can help you better understand your financial situation by letting you see your investment and bank accounts in one place. Getting started takes only a few minutes -- try it out today!
The views expressed are for informational purposes only and are not intended to serve as a forecast, a guarantee of future results, investment recommendations or an offer to buy or sell securities by FutureAdvisor. All expressions of opinion are subject to change without notice in reaction to shifting market, economic, or political conditions. The investment strategies mentioned are not personalized to your financial circumstances or investment objectives, and differences in account size, the timing of transactions and market conditions prevailing at the time of investment may lead to different results. Clients may lose money. Past performance is not indicative of future results. Investments in securities involve the risk of loss. Any tax strategies discussed should not be interpreted as tax advice and do not represent in any manner that the tax consequences detailed will be obtained. Clients should consult with their personal tax advisors regarding the tax consequences of investing.