You probably don’t need to be told that procrastination is a bad habit. However, you might not realize that it can be especially harmful when it comes to your finances.
There are plenty of reasons why people put off dealing with financial matters. But with money, in particular, that avoidance could be stemming from a sense of shame, said Eric Tyson, author of “Personal Finance in Your 20s & 30s For Dummies.” You might be telling yourself, “I know I’m not doing a good job of managing it, so I’m not going to look at it to remind myself that I’m doing a bad job,” he said.
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If you have financial troubles, procrastinating will only make them worse. Here are signs you might be a money procrastinator and ways to kick the habit.
Determine If You’re a Money Procrastinator
You might be procrastinating when it comes to your finances but don’t even realize it. Ask yourself these questions to see if you’ve been avoiding dealing with money matters.
Do you have unopened financial statements piling up? Tyson said it’s a common sign that you’re a money procrastinator if you’re not checking account statements to see where you stand. It could be a problem even if you are opening statements but aren’t bothering to keep your papers organized. “Because avoiders dislike dealing with money and related issues, they don’t spend their free time keeping documents organized and easy to find,” Tyson said.
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Are you unsure how much debt you owe? You’re likely a money procrastinator if you haven’t calculated the total amount you owe on your credit cards and loans. Tyson said that when he did financial counseling, it was common for people with consumer debt not to know how much they had racked up. “It’s another way of avoiding dealing with the reality,” he said.
Do you set aside time to think about your finances or create a long-term financial plan? Money avoiders don’t take the time to figure out their financial goals and create a plan for achieving them.
These are just a few signs that you might be a money procrastinator. In general, if you’re stressed about your finances, there’s a good chance it could be because you’re avoiding dealing with them.
Admit That You Have a Problem
You can’t change your procrastinating ways unless you acknowledge that you have a problem, Tyson said. So if any of the situations above apply to you, it’s time to admit that you’ve been avoiding your finances.
To better understand why you’ve been procrastinating, do an inventory of your current financial situation, Tyson said. Review how much money you have coming in, how much you’re spending and how much you owe. Tyson found when he was a financial counselor that the one thing that helped his clients most was doing this sort of financial checkup. You might start to feel less stressed about your finances once you actually know where you stand.
Make a To-Do List and Prioritize Tasks
If you’ve been procrastinating because you don’t know where to start, make a list of the money tasks you need to tackle. Then prioritize the items on that list, Tyson said.
Focus on the high-priority tasks first, then work your way down the list. But don’t get frustrated if it takes some time to tackle everything on your financial to-do list. Realize that it took years for you to get into this mess, and you won’t get out of it in a week or even a month, Tyson said.
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Automate Some Financial Tasks
If your money procrastination has led to late or missed payments, Tyson recommends setting up automatic payments for your bills. “With just a little upfront work with each creditor or billing company, you can rid yourself of unnecessary fees and interest and save a little time each month,” Tyson said. In fact, some lenders might lower your interest rate if you sign up for electronic transfers from your bank account because that guarantees on-time payments, he said.
Tyson also said procrastinators should make their investing automatic, advises Tyson. If your employer offers a workplace retirement plan, make the most of your 401k by having contributions automatically deducted from your paycheck. If you’re self-employed, you can open an individual retirement account — IRA, Roth IRA, SEP IRA or solo 401k — through an investment firm such as Charles Schwab, Fidelity or Vanguard. Then set up automatic monthly transfers from your checking account to your retirement account.
Track Your Progress
Tracking your progress as you tackle financial tasks might help you stop procrastinating because you’ll see the benefits of taking action. Tyson said that he gave his financial counseling clients a monthly net worth report. It gave them a sense of accomplishment to see their net worth grow as they paid off debt and/or saved more.
Your money stress also will be reduced by tracking your progress. “One of the prices a lot of people pay by avoiding money is this underlying sense of discomfort,” Tyson said. “If you get on top of this, it can make you feel more calm and confident.”
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You might be avoiding your finances because you don’t understand money matters well. Fortunately, there are plenty of free resources that can help you increase your knowledge — from personal finance books you can borrow from the public library to articles and advice available online.
“You don’t have to make it a full-time hobby, but spend time educating yourself,” Tyson said. “As you gain confidence and a base of knowledge, try to build on that rather than seeing it as a one-time event.”
Consider Getting Professional Help
To stop your money procrastinating, it might be worth it to hire a financial planner. “You want to hire somebody who is competent and has your best interest at heart,” Tyson said.
He recommends working with a fee-only financial planner who charges by the hour. You can find planners who charge by the hour through the Garret Planning Network or through the National Association of Personal Financial Advisors at NAPFA.org.
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