Recently I was reading an article about the reasons why people procrastinate and how this impacts their entrepreneurial success. As I was reading the article, I realized that these same dynamics apply to how we approach our financial life, resulting in unnecessary financial stress. Rather than enjoying life, pursuing dreams and living financially free, procrastinators wait until the last minute to deal with money issues. The results are insomnia, anxiety, depression, anger, physical illness (coming from the emotional distress), a crashing credit score, debt overload, bill collectors and a fall down the dark rabbit hole. Here is what the article said about procrastinators and how it applies to financial stress.
First of all, according to Psychology Today, 20 percent of people are “chronic procrastinators.” While all of us sometimes push things off until the last minute, especially if it is something we do not enjoy, their study shows that 20 percent push everything off all the time! And, now that we are bombarded by digital distractions, the number of procrastinators is growing. Are all those great financial apps that are supposed to help us create budgets, track our spending, save our money and find good deals actually distracting us from the important money tasks and causing financial stress instead of financial freedom? Okay, let’s look at the 4 reasons people procrastinate and see how it applies to our financial lives.
- Feeling Overwhelmed. According to the psychologists, when faced with a long list of tasks, one can become overwhelmed at the prospect of never getting through it all and shut down altogether. Rather than rising to the challenge, one dives under the covers. Or, one is in constant search of the “right time” to tackle the list. We wait until we have that “uninterrupted” time, however that moment never arrives. And the pile continues to grow. Does this sound like you? If you are married or in a relationship, there is an easy answer to this problem—divide and conquer! Each party to a relationship brings their own set of strengths and passions. Agree on your financial goals and dreams for the future. Then, divide the routine financial tasks accordingly, but make certain that there is equal sharing of the burden and that no one is left feeling financially disempowered. When the bills arrive, open right away. Or better yet, automate everything. This strategy is particularly important if you are on your own. Automate as many of your financial tasks as possible—bill paying, savings, investments, etc. If you are not a fan of this approach, then schedule financial tasks on your calendar and make their completion a priority. Remind yourself constantly that unopened bills piling up on the desk are the ingredients for disaster.
- Fatigue. People procrastinate because they are try to do mentally challenging tasks when they are tired, causing a tendency to put it off until tomorrow. Be aware of your energy cycles. Schedule your financial tasks for a time when you are most alert. Save the digital surfing for when you are in the down cycle. Is morning your shining hour? If so, then make mornings the time to pay your bills, check the accounts, track your budget performance and so forth. Night owl?? Shift your financial tasks to this time. The point is to schedule the tasks that you do not particularly like or find to be more difficult during those hours of the day when you are at the top of your mental game.
- You Absolutely Hate Dealing With the Task. Probably none of us like paying bills. And if we have a financial problem, we hate the idea of dealing with creditors, service providers, banks, loan officers, etc. The longer it is postponed, though, the more difficult the task becomes. What could have been a quick call to clear up a discrepancy or negotiate better terms, turns into ultimatums and closing doors—a certain recipe for financial stress. There two things you can do: (a) push yourself and promise yourself a special reward when the task is done or (b) find someone to help you.
- You Are Deadline Oriented. Many people perform better under pressure. Being deadline oriented is not how you want to be when dealing with financial issues. Let’s say you have a bill from an uncovered medical procedure. You cannot afford to pay the total. Tackling the problem early gives you lots of options to negotiate the total, set up a payment plan, plus clarify that the charge is accurate. Perhaps it should have gone to the insurance company. If you wait until the last day before the bill goes to a collection agency you run many risks. Perhaps you will not reach the appropriate person. The person may have less patience to deal with your questions and requests. Because you are under stress, the entire tone of the conversation can shift from friendly to antagonistic, yielding you no good results. Set yourself reminders well ahead of the deadline. Use calendar apps or google calendar, notes on the refrigerator, whatever works. You can even trick yourself, and write down a deadline that actually precedes the true deadline for the task. Bottom line is to avoid adding to your financial stress because you like to wait until the last minute before doing things.
Changing our psychological natures is not easy but it is doable. Escape from financial stress. Make financial freedom the priority in your life. Take it one day at a time and be sure to do something nice for yourself when you pass over the hurdle.