At no time of my life did I put more things off until the last minute than my first few months in college. Every hour something new would entice me to put the books aside and enjoy the other, more exciting things college had to offer.
The pickup hoops game at the gym.
The late night pizza runs.
The cute girl one dorm over.
Time and time again this would happen, especially early on in my college life. As a result of my attention to anything unrelated to studies, I would often find myself starting papers at 11:00 pm that were due the next afternoon. Talk about putting your back up against a wall. It was an all night scramble of writing, filled with Mountain Dew and Ho-Hos.
“Fairly quickly” is the answer to the question “How long did it take you to develop a more disciplined attitude?” Had to…my freshman GPA (and ultimately my graduation) was depending on it. I realized there was no way I could maintain those negative patterns of time management and succeed at that level of education.
Procrastination creeps into all areas of our life. We put off dealing with relationship issues, work assignments, our spiritual health and even kid problems. Perhaps in no area does it rear its ugly head more so than in the world of personal finance. What is it about money that keeps us from confronting our difficulty with managing it?
Are you a personal finance procrastinator? Ever said any of these things:
“I’ll do the bills later. (It will be fine if they are late.)”
“It will get better when I get a raise.”
“I’ll just rely on Social Security when I’m older.”
“I don’t have a problem with overspending.”
“I’ll just pay the minimum on my credit card debt.”
“I don’t have any money left at the end of the month to save.”
“I’m doing OK by myself…I don’t need help.”
“At least I’m not as bad off as they are.”
“My situation is so bad I don’t even want to think about it.”
“Why do I keep running into these same problems over and over?”
If you have said any of these things, you might be a personal finance procrastinator.
Question is, if this sounds familiar, how can you be snapped out of your malaise? Time for some shock treatment.
The Powerful Component of Time
Time is by far the biggest component to building wealth. The more time a person can be financially healthy and spend time saving and investing their money, the more prosperous they can become. Every day you put off dealing with your finances is another day wasted in this pursuit. If you don’t believe that, then don’t glaze over these powerful examples.
If an individual made a one-time investment at age 30 of $5,000, that investment could grow to $108,622 in 40 years assuming a conservative annual return of 8%. If, however, that investment were put off for just five years, the total in that same time frame would be reduced to $73,926.
If you were to start at age 30 with a $5,000 initial investment but instead continued to invest the same amount per year until age 70, you would have amassed a whopping $1,403,905 (again assuming an 8% annual return). Procrastinating on starting this investment pattern for just five years would reduce your total amount at age 70 to $935,510. That’s a half-million dollar difference!
Maybe there isn’t $5,000 a year in your budget to invest. Perhaps you can only afford $150 per month. That’s OK because even small amounts can really add up. If an individual begins to invest $150 per month at age 20 and those investments grow at an average of 8% per year until age 70, they will have built up a hefty $1,189,759.
If those numbers don’t shock you into some action I’m not sure what will.
All it takes to win at personal finance is some initiative and consistent effort applied over time. That’s a gentle way of saying, “Get started now and be disciplined!” A prosperous financial future is waiting for you.
How do you fight against procrastination? What financial decisions have/did you intentionally put off because you didn’t want to deal with them? What was your biggest distraction in college?
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