Procrastination vs. Patience and the Effect it’s Having on Your Wallet

Believe it or not, procrastination has just as much of an effect on your finances as it does in other aspects of your life. I would argue it has a much bigger impact on your finances because it can prolong your ability to live debt-free and hold your income hostage far longer than it should. 

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Procrastination is the opposite of patience when it comes to financial habits, and each looks a bit different in the world of money than it does in other aspects of life. So, let’s talk about procrastination versus patience and how it affects your ability to get your money bag! 

What is procrastination as it relates to finances?

Financial procrastination can take a few different forms, they may appear all at once or individually. 

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• Postponing retirement savings or not enrolling in an IRA or 401(k)
• Last minute or impulse shopping 
• Not paying bills on time
• Paying only the minimum balance on loans and credit cards

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This list might serve as a reality check, because we’ve all done at least one of these. The problem with financial procrastination is we don’t often set a strict deadline for our financial wealth nor do we have a financial plan to stay consistent with. Unlike procrastination with projects at work, or education, there is a deadline there that eventually, as it creeps up, motivates us to get it done before the deadline. 

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So, even though financial procrastination is a bit different in terms of the negative effects it has, the reasons behind financial procrastination are the same as those behind it in other aspects of daily life. 

Factors of procrastination

Emotional and psychological factors affect financial procrastination in ways that may not seem easy to overcome, but once you tackle those barriers, your financial wealth and freedom is right around the corner. 

Emotional factors

Big financial decisions are scary. Often, our past experiences with financial decisions, how we saw our parents and family manage money, and the fear of making the wrong decisions have paramount effects on why we procrastinate financial health and health wealth management habits. The fear and anxiety that most have over money, creates the cycle of making just those minimum payments, last-minute or impulse purchases, not paying bills on time, and so many more financial mistakes that are preventing you from becoming financially free. 

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On top of that though, are the psychological factors that also contribute to this cycle. 

Psychological factors 

The world of finance can be intimidating, and when there is a lack of knowledge or you don’t feel you have enough financial literacy, it only serves to increase the fear and anxiety that you feel around money. 

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Past financial experiences can have a big influence on this fear and anxiety, but not having a basic understanding of health financial habits or even the terms that are associated with basic personal finance knowledge can create a disconnect in thinking you’re able to achieve your financial goals and become debt-free. 

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When you don’t have all the information, or you don’t feel like you truly understand the basics of a topic, it makes trying to implement it and use it in your daily life incredibly difficult. Which is why financial literacy is so important for anyone, regardless of their current financial situation or their future goals. So, how can you overcome these factors that perpetuate a procrastination cycle?

Overcoming emotional and psychological factors of financial procrastination

The most difficult part is overcoming the emotional aspects and ensuring you’re sticking to the steps to get rid of the cycle of procrastination and actively working towards your financial goals. 

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1. Becoming financially literate: by actually taking the time to research, get educated and take charge of your finances by understanding the nuances in the world of finance. I have some incredible resources all over my website to help you get started on your journey to increase and live debt-free. 

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2. Break down goals and start small: in order to avoid overwhelm, set up your finance goals in a way that starts small and works up to the bigger goals. The biggest reason for procrastination is feeling overwhelmed by the amount of stuff to do and feeling like you don’t know where to start. Set a goal using the debt snowball method to pay off one of your debt accounts. This will start to free up your income and lower your debt at the same time. 

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3. Vocalize your goals: sharing your goals with a trusted friend, family member, or even a financial advisor gives you someone that can hold you accountable and help you avoid procrastination. You don’t need to go into specifics with this person if you don’t want to, but simply sharing that you’re on your financial journey and appreciating support can be enough to help you overcome the procrastination cycle.  

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Reaching your financial goals is a journey, and there may be times where it feels like you won’t reach your goals, but more often than not, doing the scary thing when it feels overwhelming, allows you to reap the rewards later.

Doing the scary thing early to reap the rewards later 

In 2016, I bought a home that was worth $213,000. It was terrifying, and anyone else who has bought a house has likely felt that same feeling – nervous, scared, doubting yourself – but I took on the monumental task of investing in a future home. 

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Today that same house is worth over $700,000 – as the old saying goes, the best time to plant a tree was 20 years ago, the second best time is now. The same goes for your finances and doing the hard thing in order to reap the rewards. The sooner you start on your financial journey and take charge of your finances, the sooner you can reap the rewards, but if you are just starting now, that’s the second best time! 

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Think about it this way, if I would have procrastinated on buying that home, it would have cost me an extra $500,000. So I know it’s easy to think that you have all the time in the world to start saving, have an emergency fund, pay off your loans, and start putting money away for your future family, but the harsh reality is the time is now – don’t wait to start your journey to the financial lifestyle you’ve always wanted.

Why tackling debt is important 

First and foremost, tackling debt is important because of the story I just told you. When you take charge of your finances and start to actively pay off your debt, it frees up your income to be able to invest in real estate that can then become your future family home, or invest your money in stocks and high yield savings accounts, making your hard-earned money also work for you. 

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Tackling that, oftentimes overwhelming, debt is important because that debt affects your finances in so many ways. 

High interest costs

Most consumer debts, such as credit cards and loans are accompanied by high interest rates. Interest charges add up quickly and end up costing you substantial amounts over time. 

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What you think costs you $1,000 ends up being way more, so by paying off your debt, you’ll end up saving money on interest payments and free up income for other more important things in life. High interest rates have a way of slowing down the process of reaching your financial goals, and ultimately postponing the financially free life you want to live.

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Impact on your credit score

Consumer debt can negatively impact your credit score, making it more difficult to qualify for favorable interest rates on future loans and credit cards. 

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A lower credit score means it affects your ability to rent an apartment, secure future employment, and even obtain insurance at affordable rates. Your credit score affects so much of the rest of your financial life, that it’s important to prioritize raising your credit score. 

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Stress and anxiety

Living under the weight of consumer debt can take a toll on your mental and emotional well-being. Constantly worrying about debt payments, collection calls, and financial insecurity can lead to stress, anxiety and even depression. 

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By eliminating your debt you remove this burden and improve, not only your mindset on money, but your quality of life as a whole. When you eliminate your debt, you free up your income for things that make your money multiply, and for things that matter most to you in life. As scary as it is, you can’t fix what you refuse to address. Understanding that your financial health has a direct impact on your overall health is critical. 

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Let’s Recap 

Financial procrastination works just like any other form of procrastination in your daily life, but it can have more adverse effects because of how your financial health also impacts the rest of your life. The cycle of procrastination starts with underlying triggers like emotional and psychological factors such as fear, anxiety, lack of financial literacy, and past experiences with finances. 

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The easiest way to overcome this seemingly perpetual cycle of procrastination is by taking charge of your finances, educating yourself in financial literacy and understanding the in’s and out’s that alleviate that fear and anxiety. Set goals that start small and fight the overwhelm. Allow yourself to work up to the bigger financial goals you have in order to slowly ease you into the goal setting process and work your way towards your financial freedom. 

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Part of that financial freedom is paying off debt, and it’s so important because it not only affects your financial health but in turn affects your overall health. High interest rates, credit score, and stress and anxiety are all tied to your debt, and when you focus on paying that debt off, you free up your income, lower your stress and anxiety around money, and watch yourself get closer to your financial goals.

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