As I’m coming off the October 15th deadline, I’ve given a lot of thought to why so many of us procrastinate. The October 15th deadline is the extended due date for personal tax returns that were originally due April 15th, so at this point we are 9 ½ months into the next year. When the process is delayed and the deadline approaches, the unnecessary stress caused to tax preparers and clients is visible, but it is avoidable. This stress doesn’t even take into account the actual dollars it costs to file and pay your returns late with accumulated interest and penalties.
If we can’t find ways to not procrastinate when there are direct financial penalties from government agencies, how are we going to avoid procrastinating on important decisions and moves in our lives that have no deadlines?
One example I love to reference comes from Dave Ramsey’s Financial Peace class and highlights the negative long-term impact of procrastinating and starting to save later in the game rather than now. Dave’s example references, Jack, a person that starts early and invests $200 a month for 9 years and stops. Jack’s friend, Blake, doesn’t start investing until Jack has stopped. Since he waited, he decides to invest the same $200 a month, but he contributes $200 a month until retirement. Even though Blake invests for 38 years versus Jack’s 9 years, he has accumulated significantly less money than Jack at retirement. The power of time and compounding is too much to overcome.
If we know that we shouldn’t procrastinate, and most of us don’t mean to push off the inevitable to the last minute, how do we avoid it? One of my favorite authors and speakers, James Clear, has an article on the methods to avoid procrastination. Mr. Clear’s book Atomic Habits has ideas that helped me put daily steps in place so that I accomplish important tasks on time. Mr. Clear outlines four easy steps to help you avoid procrastination:
- Make the Rewards of Taking Action More Immediate
- Make the Consequences of Procrastination More Immediate
- Design Your Future Actions
- Make the Task More Achievable
One of my favorite points in the article is to use a method called temptation bundling. The basic concept is:
Only do [THING YOU LOVE] while doing [THING YOU PROCRASTINATE ON].
In the self-employed, small business owner world, a good example would be to:
Only pay yourself for the month while doing the bookkeeping and bank reconciliation.
After a short period of time you associate your reward (“thing you love”) with the required action, and you have a habit that is difficult to break. Ultimately, you’ll have to complete the undesirable task anyway, so why not get rid of the stress of procrastination?
Procrastination can derail many of your immediate and long-term goals, so contact us when you are ready to move forward with your important financial plans.