I’m a procrastinator.
I mailed in my taxes on deadline day, I wrote almost every one of my college essays the night before it was due, and I made it through high school doing homework for the next class during the class before at least 80 percent of the time.
Sound familiar? Having flashbacks?
I’m recalling 2am runs to the vending machine for Cheetos and Coca-Cola while pulling all-nighters. I’ve since graduated to tea and whisky, because let’s face it, I’m still procrastinating.
Despite my best attempts to plan ahead and avoid the stress of the last minute rush, I’ve found that procrastination works.
It gives me laser-like focus and clarity that I find nearly impossible to replicate when there’s ample time to think things through.
As it turns out, procrastination can be a useful tool. But there’s a major caveat…
The benefits of procrastination only apply when there’s a definitive deadline.
It’s the sense of impending doom deadlines deliver that provide the otherwise elusive motivation for getting things done.
Unfortunately, many of the most important aspects of our lives don’t come with deadlines.
Our health, our relationships and most certainly our finances don’t operate on a set timeline or within a school-like structure, and without definitive due dates, the motivational, clarity producing panic of the last minute doesn’t set in, leaving procrastination to linger on and on and on… and that’s when things get dangerous.
Within the framework of personal finance, procrastination results in reactionary responses – meaning, we fail to engage with our finances until shit hits the fan.
A 2015 study found that the top catalysts for rethinking financial planning are unexpected windfalls and financial emergencies. Just 20% of people actually have a written financial plan.
Without deadlines to incite proactive financial planning, it’s dangerously easy to default to doing nothing and accept the disempowering notion that our financial lives are happening to us, rather than us being the driver of our financial choices.
Every time we engage in financial procrastination, we bring the self-fulfilling prophecy of the former into being.
[clickToTweet tweet=”Without deadlines to incite proactive financial planning, it’s dangerously easy to default to doing nothing” quote=”Without deadlines to incite proactive financial planning, it’s dangerously easy to default to doing nothing”]
As a procrastinator, I get it. There are at least ten things on my to do list I’ve repeatedly pushed back – dental cleanings, driver’s license renewal, donating my latest round of closet clear outs – but my personal finances, remarkably, are no longer on that list.
Here are the three strategies I used to become proactive and combat the strong pull of financial procrastination…
Most of us walk around with a sense of what we want, but the specifics (for the most part) are fuzzy and far away.
When we fail to get specific, we allow ourselves to remain comfortable with our current course of action, enabling further financial procrastination because there is no sense of clarity or urgency to do otherwise.
But when we move from something general like, “I need to build up my short-term savings” to, “I need to save up $50,000 for a home down payment in the next five years,” the definitiveness incites proactivity.
Why? Because we hate failure!
By forcing ourselves to be specific with our goals, we create tangible ways of measuring our failure and do what we can to avoid it – even if it means something as difficult as putting an end to financial procrastination.
[clickToTweet tweet=”By getting specific with our goals, we create tangible ways of measuring our failure and do what we can to avoid it” quote=”By getting specific with our goals, we create tangible ways of measuring our failure and do what we can to avoid it”]
Step 1: Move away from vague, big picture goals and get grounded in concrete, tangible action items.
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Specificity alone though isn’t enough.
Saving up $50,000 for a down payment for example seems so insanely daunting, it can feel nearly impossible to get started – so you might not start at all.
Instead of defaulting to delay or defeat, break down each action item into a manageable next step.
In the case of saving up $50,000 down payment, the next step would be calculating the monthly or weekly savings target needed to reach $50,000 in five years.
There’s certainly nothing daunting or impossible about using a calculator.
Whatever your big idea or vision is, make it manageable by breaking it down into as many individual components as possible and tackling them one by one.
It’s far more manageable to say, “Contact HR department for 401k benefit explanation” than it is to say “Save $2 million for retirement”.
By breaking down your big picture goals, you create opportunities for daily, weekly and monthly victories, building a lifestyle of small wins that generates the forward momentum you need to keep financial procrastination at bay and build a lifestyle supported by financial success.
Step 2: Break each financial goal down into a tangible (and manageable) next step.
As motivating as your goals may be, behavioral economists have found that the pain of losing something is nearly twice as powerful as the pleasure of gaining something.
The most powerful force in combating your financial procrastination may not be what you stand to gain by being proactive, but what you stand to lose by doing nothing.
So ask yourself, Are you willing to miss out on your dreams? Are you willing to give up a future on your own terms? Are you willing to settle?
I know I’m not, and that’s enough motivation, even for me, to stop procrastinating!
Step 3: Stay motivated by reminding yourself of your goals and asking yourself if you’re really OK with settling for anything less!
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