March 18, 2018
If we all started thinking about it, we would discover a horrifyingly long list of ways we have thrown away money by putting off essential tasks. But at least we are not alone. If you polled friends and co-workers, there’s a good chance you’d hear a number of similar experiences all caused by procrastination.
I have known a couple of people who switched their family’s cellphone plans from a major national carrier to a smaller provider in order to save money. Purchasing the phones upfront set them back several hundred dollars. Because they were feeling the pinch of that major purchase, or maybe it was sheer laziness, one friend procrastinated on buying protective cases for them. They thought about it a few times, and meant to go online to purchase one, but for whatever reason they never did. Less than month after their purchase they accidentally dropped their phone and shattered the screen. It cost him about $100 — double the cost of the protective case he ended up buying after the fact in order to get the phone fixed.
In short, procrastinating cost him a fair amount of money. It’s not the first time something like this has happened and unless he pays attention, it won’t be the last.
Why do we avoid taking care of important tasks at our own expense?
“Fear is the number one reason people procrastinate about money,” says Certified Martha Beck Life Coach M.C. Coolidge. “We think we procrastinate because we’re too busy, the kids have homework, the dog needs to be walked, we can’t find the calculator, or we’re just feeling lazy. But what’s really going on is, we’re so frightened we’re frozen in our tracks.”
While we’ll delve into how to fight that fear in a moment, in the meantime, here are five things we need to pay attention to that we know can cost us dearly:
1. Penalties add up
We all have that friend who seems like one of the most disciplined people we know. Let’s call her Leslie. Her careful spending allowed her family to pay off their mortgage years ago, she’s written a novel (something she could have easily put off until tomorrow!) and she did all this while working and raising a family. But she too confesses that at times, she can be the “queen of procrastination.”
“There was the time when I forgot to pay the electric bill, and when we came back from vacation we found a freezer full of spoiled food and dead fish floating in the fish tank — yeah, it was bad,” Leslie says. “There was a $50 re-connect fee, crying children and an extra night of no power, just for good measure. I found the disconnect notice in a pile of unopened mail lying on the kitchen counter.”
Reconnection fees, late fees and other charges can make a small bill mushroom into a much larger one. An actual friend of mine once was charged a $400 fee for failing to renew their corporation’s annual filing with the state on time. The original bill was $150 and they had the money to pay it. They just put it off and then “forgot” about it.
Other ways penalties can cost you:
2. The Devil’s in the Details
As founder of the nonprofit organization Women’s Money, Gina Robison-Billups spends many of her waking hours focusing on ways to help women make the most of their money. But she learned the hard way that bargain hunting sometimes carries a price:
“I lost a TON of money because Southwest airlines changed their policy on no-shows, and now you lose your money if you are a no-show,” she laments. “This is where I did get in budget trouble because I booked four months of advanced travel to get the best rate, thinking that I could be a no-show if the trips had to be canceled and I would at least have travel funds left. I was left with nothing — no vouchers, no money. Painful lesson,” she says.
All the bargain-hunting in the world won’t save you money if you neglect to notice the details in the fine print. Have you ever been hit with:
3. An Ounce of Prevention
“The last time I saw my dentist, he told me that if I came in sooner that cavity wouldn’t have turned into a root canal,” said Susan Nilon. She had plenty of valid excuses for neglecting to take time out for routine appointments; after all, she was running a radio station, hosting a daily two-hour program, all while raising a teenager and volunteering for a range of local organizations. But she admits that she would have saved money if she took the time to take care of things like regular dental check-ups. “It’s the small little things that don’t seem to be a big thing that turn into a big problem,” she observed.
Whether it is regular dental check-ups, health screenings or tests, waiting can not only cost you a small fortune in medical bills later, it can even be life-threatening.
And it’s not just your body that can use preventive maintenance. Other routine items that can turn into costly repairs if neglected include:
And, of course there are check-ups and vaccinations for your pets that need to be taken care of.
4. You Purchased What?
Ever had the shock of getting a credit card bill that’s higher than you expected? If you’re not carefully tracking your spending, no doubt that’s happened to you, and perhaps more than once. It’s one of the reasons we wind up with credit card debt; we have good intentions of paying our bill in full but then charge more than we planned.
In your closet are there any pieces of clothing with tags still hanging from them? If so it was probably an item you planned to return after you realized you’d never wear it, but you waited too long and the time frame for returning it expired. Your next plan was to sell it on eBay, but you haven’t gotten around to that, either. There’s about $50 down the drain (and a reminder of that every time you look in your closet).
Though gift cards no longer carry the short expiration dates they used to, if you don’t use them you are still throwing away money. If someone gave you a gift card you can’t use, you may want to donate it to someone who can use it, or sell it online for cash.
5. Not Shopping When You Should
In 1969, Tom Corley’s father’s warehouse burned to the ground, and with it the family’s business. “My Dad told me much later in life that he had been thinking about getting additional insurance on his inventory prior to the warehouse burning down,” says Corley, the author of the best-seller Rich Habits. “Unfortunately, he dragged his feet too long. At the time (1970), he had about $3 million in cash (about $20 million in today’s dollars), so it was not about the money. He procrastinated and random bad luck caught him by surprise.”
Whether it’s checking that your insurance beneficiaries are current, or shopping for that life insurance/car/health insurance policy, sometimes the consequences of failing to act can be significant. If your homeowner’s insurance rates were to double, you’d be looking for a new policy immediately. Not only would you most likely find a better rate (with a better company) but you’d discover you had overpaid the year before.
Shopping is also important when it comes to credit. For example, you may be paying a higher rate than you need to on your credit card, car loan or even your mortgage because you haven’t taken the time to look for a lower-rate credit card or loan in a really long time. Or you may be paying more because you have procrastinated on checking — or fixing — your credit scores. This can be incredibly expensive, though. According to a lifetime cost of debt calculator, the difference between what you’ll pay with excellent credit versus poor credit is nearly $160,000!
How to Tame the Procrastination Beast
Changing ingrained habits can be hard work, and there are all kinds of hurdles facing us, among them our brains and our biology. As Bob Sullivan and Hugh Thompson explain in in their book, “Getting Unstuck: Breaking Free of the Plateau Effect”, our bodies evolved to rest between periods of hard work — finding food, or running from lions — but in our now 24/7 lifestyles, our “impulse to rest is unchecked,” he writes. “… bodies at rest tend to stay at rest. Getting up always involves at least a small kick in the butt.”
And sometimes the problem goes deeper, says Coolidge:
Every time we procrastinate out of fear, every time we avoid taking conscious action to take care of our finances, we’re unconsciously sending a message to ourselves: “I’m not worth the effort.” That message, in turn, perpetuates the procrastination cycle: “I didn’t take action, so I feel unworthy and because I feel unworthy, I’m not motivated to take action.”
Sullivan and Thompson warn that changing how you get things done can be challenging: “It’s essential for anyone who plans to take on the battle of distraction to know this: the temptations never go away.”
But there are techniques you can use to improve. Among them:
Set a time limit.
If a decision is relatively unimportant, make the time limit short and set a timer. Or delegate the decision and live with the results, suggest Sullivan and Thompson in their book.
Take one tiny step at a time.
Take “turtle steps,” Coolidge recommends. Breaking tasks that seem overwhelming into tiny steps, “will allow us to feel good about doing the barest minimum possible, won’t overwhelm our to-do lists, and still moves us incrementally, and surely, toward our goals,” she says.
Create daily to-do lists.
Among the five strategies Corley uses to stop procrastination, one is to create daily to-do lists which include two types: (1) “Goal To-Do’s” which he defines as “specific To-Do’s that are tied to your goals. These may be goals related to your job or to a big goal, dream or purpose in life” and (2) “Non-Goal To-Do’s” which are the routine administrative tasks you need to get done. With that list in mind, you create your “Daily 5″ which are “five things that you do every day that move you forward to accomplishing some big goal, dream or purpose in life.” He says “These five things could take as little as an hour to perform each day.”
When you automate routine tasks, like setting up recurring bills on auto pay, you not only free up the time required to make those payments, you will have less to worry about. (“Did I remember to make that credit card payment? I better double check.”) Some experts go as far as suggesting you limit your wardrobe so you don’t have to agonize over unimportant decisions like what to wear in the morning, freeing your mental energy for more important tasks.
Plus, automatic payments can ensure you won’t forget to make a payment, which can ding your credit scores. (You can get your free credit scores, updated monthly at credit.com.)
“I’m a big believer in setting reminders, because who thinks about finance 24/7?” says Stephanie Chan, founder of the financial education website for millennials, Outer Worth, “To avoid last-minute money stresses, I schedule reminders to notify myself of upcoming payments, filing taxes well before the rush and contributing to my retirement investment.”
You saved $300 by shopping around for car insurance? Take 10 or 20% of that savings and splurge on a nice lunch out, a manicure or a round of golf. Use the rest to pay down debt or build your emergency savings fund.
How much has procrastination cost you?