Sports fans are always waiting for next year. In any given season, only four teams out of 122 in the four major U.S. professional sports leagues win their respective championship. 118 teams and their fan bases are left hoping that next year will be different.
Of course we always have hope, right? A few shrewd personnel moves from the front office management can surely turn things around. And maybe, just maybe the manager will finally figure it out next year and make all the right decisions.
Unfortunately, most of the time things don’t get better. The team doesn’t improve. There are injuries. Managers get fired. Free agents go elsewhere.
And once again we are left waiting for next year to get things right.
Many people adopt this same approach with their finances. Instead of addressing their money problems right now they take the “waiting for next year” approach. People who follow this way of thinking typically:
- Do not have sense of urgency. They think it will simply get better tomorrow on it’s own.
- Turn a blind eye to the obvious holes in their financial lineup. They overspend, routinely go into debt and save very little.
- Look for ways to get rich quick instead of engaging in the long but steady wealth building process.
- Don’t ask for help or advice from someone who’s been there and done that.
- Get discouraged about their situation. Their attitude squelches their desire and enthusiasm to move forward.
- Repeat the same mistakes over and over again. Consequently, they get the same results over and over again.
Do any of these things characterize your life? If so, take heart. There are steps to break through the malaise to start working on your financial problems right now.
Waiting For Next Year: A Procrastinator’s Dream?
Do you love to put things off until the last minute? Ever wonder where that came from? Most likely you weren’t born that way but developed it in grade school. Ever turn in an assignment early? Right…rarely.
When deadlines approach procrastinators go into panic mode, desperately trying to get their project done. This usually involves locking themselves out of sight late into the night, all the while sipping on a steady stream of coffee.
I’ve heard procrastinators say they love it. They thrive on the energy of the deadline. It helps them think and do their best work. But I’m not sure I buy it.
I do not like to procrastinate. When I have, I’ll swear to myself it will never happen again. No matter what happens though I can’t shake the procrastination syndrome…not entirely. It seems it’s a natural tendency for us to put things off. I have to be intentional to fight it.
The problem when it comes to your money and the waiting for next year approach is that there is no deadline. It’s not like you can check off a month and say, “Well, I’ll never need money in the future. Guess that’s taken care of.” No, there will be multiple issues until the day you die that require your attention. Personal finance is a very open ended project.
So you can’t delay thinking about your money. You need to get some savings today. You need to get out of debt today. You need to start investing today.
Now I know those things might not be able to physically happen today. But you can develop a mindset to attack them today. That’s what I’m really getting at. You can’t put off until tomorrow what you can start working on today. Here’s a little example to drive that point home.
The Actual Cost of Waiting for Next Year
There is a financial fallout from waiting to tackle your finances. No matter what you are trying to do it won’t bet better by itself. Remember the Second Law of Thermodynamics from science class? It states that there is a tendency for any isolated system to trend towards more disorder. So it will be with your money if you don’t give it attention. Your situation will only get worse and you’ll miss out on what could have been.
For example, let’s look at retirement investing. The contribution limit for a Roth IRA in 2016 is $5,500 per year for those who qualify. If you make a one-time investment of $5,500 into a Roth IRA at age 30, and let that grow at a conservative average of 8% per year until age 70, you will have amassed $119,484.
If however you follow the “waiting for next year” mindset over and over and put off making that investment for just five years (at age 35) the total by age 70 is reduced to $81,319.
Do any calculation with different numbers, invested at different ages with different investment return percentages and you’ll find the same pattern. Waiting for next year to invest can cost you big time. The same is true with any other financial problem you are trying to tackle.
3 Steps to Moving Forward
So at this point you are probably wondering how to stop waiting for next year to tackle your finances. How do you get going right now? Well, there are three steps that have to take place for you to win with your money. They won’t be easy or happen overnight. But you will have to move through them to succeed.
First, you simply have to start dreaming again. You’ve been in a financial mess for so long you don’t know what it’s like to not be in one. It feels like you will never get out. That feeling keeps you trapped and you just can’t see how to ever be successful with money.
You can be successful but you have to envision the success. In short, you have to really want it and believe you could make it.
What will help you is to read success stories of people who have made it. With the number of personal finance blogs, you can easily find people who were in the same shape as you and overcame it. Reading other people’s stories is a great motivational tool to kick-start your dreaming.
The second step may be the hardest one and that will be to cut the bad habits. Saying “No” to a bad habit is challenging. They are ingrained in us…that’s why they are called habits. Letting go of things we’ve been doing for so long takes a tremendous amount of will-power. And sometimes we simply struggle finding it.
But cutting the bad habits is simply a must to move forward. You can’t get out of debt if you keep going into debt. You can’t save if you continue to spend wildly. You can’t invest if you blow all your money on the moment. Bad habits are the lifeblood for the waiting for next year mindset.
The final step will the be the longest one to play out. You could dream in a day. Although unlikely, you could theoretically go cold turkey on bad habits in day. However, you can’t get out of your mess in day. And that’s were a good plan can make all the difference.
You may not know where to find a good financial plan. How do you figure out the steps to make things right anyway? There are lots of opinions out there. The one that helped my wife and I came by reading Dave Ramsey’s literature and then attending his Financial Peace University classes. If you are looking for direction that would be a great place to start.
Once you know the right steps to take, winning with your money becomes a matter of discipline. The more of it you have the better off you’ll be.
The truth is your financial planning will never stop. You will have to stick with it the rest of your life. But that’s a good thing. You’ll always be one step ahead and will never lapse back into your waiting for next year, procrastinator attitude.
Questions: Are you living the waiting for next year life? What keeps you procrastinating on your finances? How did you break through when you were in tough financial shape? Did anyone help you or did you figure it out on your own?