I will stop procrastinating – tomorrow. Procrastination is that strong and mysterious force that keeps us from completing important tasks. Like the college student that pulls an all-nighter to cram for the big test the next day. But in college the day of the test is a hard deadline and given a deadline most people will find a way to meet it even if they have to cram.
Many important tasks do not have deadlines and without deadlines a mild case of procrastination can turn into a big mess. I am thinking about someone who hasn’t cleaned out his three car garage for years and now there is so much stuff in the garage that they can’t park a car in it. Now it is such a mess that it will take a herculean effort to clean it up.
This is the position a lot of people are in with financial matters. Even people who are not chronic procrastinators seem to avoid doing even the most basic things that could really make a difference in their lives and avoid their own big mess. I am convinced this happens because you cannot immediately see the results of your actions. But as with most important things the longer you put them off the worse the outcome is going to be. Here are a few of the really important things I see people putting off.
Saving. Number one procrastination by far is putting away money for the future. Most people that don’t save have some massive rationalization for why they are not saving. The most quoted one is that I hear is that they don’t have enough money to save – as they call me on their $800 cell phone with the $100 a month calling plan from their SUV that they lease for $800 a month on their way to buy a new $1,000 65” 4K ultra HD flat screen so they can take advantage of their $200 a month cable TV package. You get the point.
The second biggest rationalization is that they need some “real money” before they can start to invest. You need at least ten thousand or maybe a hundred thousand or even a million dollars to invest, right? Seriously, I hear this all the time. The truth is that starting to save any amount even if it is $50 a month will build over time and once you see that growth you will “get it” and start saving more.
Getting Out of Debt. This is on the edge of procrastination. Most people know they should not have so much debt yet they just can’t help themselves. Many people know how to get out of debt, they just don’t do it. Stop putting it off. Get on a budget clean up the mess and start saving. No one is going to do it for you. The longer you wait the harder it is to do.
Life Insurance. Generally, everyone would agree that if you have family that depends on your income – you need enough insurance to take care of them if something happens to you. Yet, I see people who should have life insurance that don’t have enough or don’t have any at all. When asked they are say it’s too expensive or they don’t need it. They know they need it they are just procrastinating. And it won’t be that expensive if you stick to term life for a set number of years and avoid life insurance with a savings component.
Retirement Planning. I have had people come to me 6 months before they want to retire and want to do some planning. They have no idea where their income is going to come from or if they even have enough to retire. They have been procrastinating for at least 15 years. This is one time that procrastinating can really cost you some money. The longer you wait and the closer to retirement you are the narrower your options become and the less comfortable you will be in retirement. You should start planning for retirement at least 15 years before plan to retire. If you are in this position don’t put it off any longer.
Making a Will. This is something people know they should do but just can’t seem to find the time. Again there is no hurry. Procrastinate all you want. You are never going to die, well at least not today. Many times it is not that you don’t have a will, it’s just that it is 20 years old. Since then you got married or have kids or your kids are grown or you got divorced or re-married. Any life event should be a trigger to revisit your will with an attorney. The result of procrastination in this instance can cause great financial loss and the break up of families.
Bill Oldfather is a fee-only financial planner and investment advisor. Oldfather Financial Services is an SEC Registered Investment Advisor based in Kearney NE. Email to email@example.com