How Procrastination Could Lead to Money Problems (and What to Do About It)Submitted by Castlebar Asset Management on May 22nd, 2018
Let’s face it: not everyone finds it fun to sit down with a spreadsheet and pour over numbers. “Budget” is a bad word to a lot of people, and facing up to certain aspects of your financial life can leave you feeling stressed, unhappy, and worried.
It’s not surprising that many people want to avoid dealing with their money altogether, and so they procrastinate on important financial planning tasks.
But here’s the thing: there’s a real cost to waiting, and any issues you might have now can compound into huge money problems down the road.
Avoiding Money Problems Only Makes Them Worse
Whether you have an actual health concern or just want to take preventative measures, you probably take a trip to see a medical professional at least once a year. Even with nothing obviously wrong, it’s nice to have a doctor give you a physical and make sure there are no underlying problems.
And when you have an actual problem that you do know about, going to the doctor means getting relief and a way to solve that problem and feel better. Your finances aren’t much different.
Just like with certain aspects of your health, an ounce of prevention in your financial life is worth well more than a pound of cure -- and that’s what proper planning can do for you.
But even when you run into a financial problem, dealing with it right away is critical. The faster you act, the more quickly you can not only solve the issue but also minimize any potential damage it could do to your overall wealth.
Compounding is a powerful force in finance and it can work either for or against you. Take your investments as an example. If you can make wise choices and keep your money in the market for a period of time, you’ll most likely be rewarded with a significant nest egg down the road thanks to compounding returns.
But again, compounding can only work for you if you give it time to do so -- which means you need to act (and invest) now to get the benefit.
And on the flip side, compounding can hurt you. What begins as a small and relatively harmless mistake can cost you tens thousands of dollars (or even more) the longer it goes unnoticed or uncorrected.
This penalty for procrastination could take the form of missed opportunities, or it could be a direct and tangible cost through something like overly high investment fees or hanging on to debt longer than you needed to.
The bottom line is this: making the right money moves now could make the difference of tens or even hundreds of thousands of dollars in wealth for you down the road. The longer you wait, the harder it will be to create that kind of wealth for yourself -- and the more you expose yourself to the risks of unnoticed, unaddressed mistakes.
Ignorance Is Only Bliss for a Moment
If thinking about facing your financial reality makes you squirm or feel really uncomfortable, you’re not alone. A lot of people avoid talking about money -- or even seeking out the help of a financial planner when they know that would really benefit them -- because it can be scary.
You might be afraid of being judged. You might feel a lot of shame around your financial situation or past financial mistakes. You may even feel like you should know more than you do (or should have known better on some previous decisions).
It makes sense to feel that way, but the past is in the past. You can’t do anything to change it -- and procrastinating on your future is only going to lead to more money problems.
You can only think, “I’ll worry about this later” so many times before suddenly, you realize you missed the boat on your biggest financial goals and may never catch up to the point where you can enjoy the life you wanted.
The good news is that you can beat your procrastination -- and avoid countless money problems -- by simply getting started with good planning. Even better news? This isn’t something you have to deal with on your own.
How Good Planning Today Can Offset Past Procrastination
As financial planners, it’s our job to know the right strategies for you to take (so don’t worry if you don’t know everything about money; you don’t have to!).
It’s also our job to create a space where you can freely talk about money. There’s no judgment and we don’t waste time scolding or lecturing you about what you should or shouldn’t do.
Instead, we get right to the point:
It might feel easier now to ignore your balance sheet or budget. It definitely feels more comfortable to delay tough conversations. But it’s only easy or comfortable in the moment.
Later on down the road, it becomes very painful, difficult, and uncomfortable if you find yourself in a position where you can’t afford the lifestyle you want before and after retirement simply because you put off planning for it for too long.
Don’t let that be you. Take action -- and do it today! The best time to start truly is right now, so you can make the most of the time and the resources you have to map out the kind of life and financial security you’d like to enjoy.
Disclaimer: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.