This post is from staff writer Richard Barrington.
Co-workers tend to look at me as someone who dives head-first into projects and generally meets deadlines ahead of schedule, so they don’t realize my hidden secret.
I’m a recovering procrastinator.
When I was a student, I did everything at the last minute. I suppose the blessing was that it taught me to work fast, but the stress made me miserable, and often the results were not my best work. Once I started my career, with so much more at stake, I made a conscious change. I’m not sure that the natural tendency to procrastinate every really left me, which is why I refer to myself as a recovering procrastinator. I force myself to jump on every project as soon as it comes up, because I know that the longer I delay, the harder it will be to get started.
The result is much better productivity, but that’s not why I do it. The truth is that it just makes me happier. There’s an awful lot of stress and misery in being a procrastinator, and once I realized that, I chose to avoid it.
Anyway, I bring all this up because procrastination has a terrible effect on personal finance. The more you neglect your responsibilities or put off saving, the worse your finances will be. So, here are four tips from a procrastinator’s point of view for overcoming the tendency to delay financial decisions:
- Use automatic deductions to take the effort out of savings. Saving money effectively relies on starting early and being consistent — two things that procrastinators are not good at. If you find you often don’t get around to putting money into savings, set it up to happen automatically. If your employer sponsors a retirement plan, you can generally have contributions automatically deducted from your payroll. Even without a retirement plan, you can save money out of your paycheck by having a little more than you need for taxes withheld every week. Financial advisers don’t generally recommend that, but with interest rates so low these days, you aren’t losing much by getting your money a little later, and having a lump sum accumulate automatically is simply a more effective saving method for many people than having to make a regular effort throughout the year. Finally, check with your bank to see if you can have money regularly transferred from your checking account into a savings vehicle, so you can put more savings on autopilot.
- You can start saving for retirement before you do any actual retirement planning. Most people realize more savings accumulate if you start early, but when you are young, retirement planning seems like a big chore that is best put off until you are a little older. Here’s the thing though — you don’t really need to go through a detailed planning process before you start setting aside some retirement money. You know you’ll need that money later, even if you haven’t yet set specific goals. Don’t get me wrong — the planning process is important and you should get to it eventually. It’s just that for most people, setting up payroll deductions or some other savings mechanism is a much smaller barrier than going through detailed retirement planning, so get the money flowing first if you find that easier.
- Learn to love IRA contributions. IRA contributions not only have tax advantages, but they should be a procrastinator’s dream. Not only do they extend the official end of the prior year until the April 15th tax deadline (that is, you’ll be able to make a 2013 contribution until April 15, 2014), but special “catch-up” contributions are available to older taxpayers who may be a little behind in their retirement savings.
- Honor the pleasure principle. In psychology, the pleasure principle is simply the idea that a lot of human behavior is motivated by seeking pleasure. Overcoming procrastination does not have to be based completely on puritanical concepts like self-denial and discipline. You can honor the pleasure principle by looking for enjoyable aspects of the task at hand. Seemingly thankless tasks like retirement planning and saving can be leavened by fantasies about the vacations you’ll take or the things you’ll have time for when you meet your retirement goals. And, of course, work itself goes by much more effortlessly — and often with better results — when you decide to enjoy it. You won’t like everything about your job, but focus on the parts you do like, and get as much satisfaction as you can out of that.
I hope some of this is helpful to my fellow procrastinators. Acknowledging and confronting my tendency to put things off has worked in my career and in my personal finances. I’m semi-retired now, so you could say I’ve taken the approach of being a little lazy on the back end of life, rather than on the front end. Still, I got this blog written ahead of schedule — and that feels great.
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