The other night, I stopped by the library, found a book, and sidled up to the checkout counter. The kind woman on the other side informed me that I owed $7.80 in fines.

I didn't expect this. "What book was that late?" I asked. The librarian printed out a list. It wasn't a book. It was seven books. And here's the funny part: They all had to do with personal finances, money management, and living below my means. Clearly, when it comes to improving my net worth, the spirit is willing, but the ability to get my act together is weak.

So $7.80 isn't going to alter my kids' chances of going to college or postpone my retirement (though if I had put it in a Roth IRA, it could've been worth $300 by the time I retired, assuming 11% annual returns and no intervening overdose on supersize fries). I'd be OK with occasional blunders if they resulted in such minor penalties. Alas, that's just not the case.

Many of my dilly-dalliances have cost -- or will cost -- much more than the price of a movie ticket. Chances are, you're guilty of similar sins of omission, dereliction, and inability to delay gratification. Let's take a look at some of the most common ways lollygagging can lead to losses.

Late fees
Continuing with the theme of paying penalties for "just not getting around to it" (did I mention that my library is within walking distance of my house?), let's talk about late fees. You can get charged late fees on all kinds of payments -- from mortgages to tuition payments -- but let's focus on the most common: credit card payments. What happens if you're more than 30 days late paying your bill? There are several painful possibilities:

  • A late fee (of course)
  • A higher interest rate
  • A spotty credit record (which makes borrowing money more difficult and expensive, and can even drive up the cost of getting insurance, according to The Washington Post)

Add it all up, and you could be talking hundreds of dollars, maybe thousands -- all for not sticking a check in an envelope, putting a stamp on the envelope, and putting it in the mail on time. Worth it?

Putting off paperwork
While this is related to not sending in a payment on time, there are other reasons why the size of your cash pile can be inversely related to the size of your paper pile. Much money has been lost because I relegated something to the "To Do" pile, only to never get it done. There's the amended tax return I never filed, which would have resulted in a refund. I still have the forms to sign up for Johnson & Johnson's (NYSE:JNJ) dividend reinvestment plan. I received those forms when the stock was at $40 a share. Now, it's above $50. Don't tell my wife.

This weekend, I met a guy who decided to change jobs. And when you change jobs, you have to change health coverage. Sometimes, the new coverage doesn't kick in immediately, which is one of the reasons the powers that be invented COBRA -- insurance coverage to fill in during the transition periods. This fellow had the COBRA paperwork.

He was reminded to fill it out. But he didn't think it was important -- until a boat trailer (with boat on board) smashed his foot. Nary a bone was spared. He's not been able to return to work, and he's had to pay for every bit of the medical bills. (How could a boat trailer come off a hitch and fall on a guy's foot? That's why the powers that be invented lawyers.)

Do you have any paperwork longing for your attention? Perhaps it's the forms for refinancing your mortgage (which you first gathered before rates shot up). Or maybe all the literature you gathered in order to find a better bank (in the meantime, your savings have earned nothing, and CD rates have dropped). Or perhaps you haven't saved for your retirement because you can't figure out which account -- a 401(k), traditional IRA, or Roth? -- would be best for you. (If indecision is the cause of your delays, then perhaps some expert direction from TMF Money Advisor could help.) It might be painful to contemplate the consequences of procrastination -- but there's a reason cattle prods don't tickle.

Delaying your planning
One of the biggest allies of a good financial plan is time. The more you plan ahead, the more time you'll have to accumulate savings, the more time those savings will have to bask in the glow of compounded growth, and the more risk you can take with those savings since longer time horizons can compensate for investment volatility.

But procrastination squanders time, putting your plan, and future, at a disadvantage. Let's look at the classic example of people saving for retirement. Investors A, B, C, and D (who, it might be guessed, are quadruplets that come from a family of low imagination) each invest $5,000 a year for 10 years. The only difference is the age at which each began. Here are the hypothetical-just-for-illustration-don't-sue-me-if-this-doesn't-happen-to-you results:

              Age Began   AmountInvestor   Investing   By Age 65   A             25       $787,176B             35       $346,615C             45       $168,887D             55       $83,227
  *Illustration assumes 11% annual growth and does not account for taxes.

Even though each person invested the same amount of money, they have monstrously different amounts at retirement. Investor A began when she was 25 years old, and stopped when she was 35. And her nest egg dwarfs those of her siblings (which makes her both popular and unpopular at family gatherings).

Even starting a year later can make a big difference. Let's say a 40-year-old begins contributing $3,000 annually to a Roth IRA, and will contribute to do so until he retires at age 65. Assuming 9% annual growth, he'll have $224,448. Now, let's assume that instead of making that first investment at age 40, he spends a year looking for the best brokerage account, analyzing investments, and stalking mutual fund managers, so he doesn't make his first investment until he's 41. How much will he have at retirement? By age 65, he'll have just $200,318 -- a $24,130 difference due to starting a year later.

The 15-minute solution
There are scads of reasons why we procrastinate: perfectionism, boredom, fear, indecision, indigestion. For me, it often comes down to an overestimation of how long a task will take and of how unpleasant the task will be. So here's a solution: Break everything into 15-minute chunks. You can stand just about anything for 15 minutes, right? And how long does it take to stick a check in the mail, fill out a form, or plan your retirement? OK, some things require more than a quarter-hour, but you can break the bigger jobs into pieces, doing a little bit at a time.

To make jobs (especially paperwork) more tolerable, go through your pile while watching a movie. Rent a good video, plop your big, bad self and your big, bad "To Do" box in front of the telly, and remember not to sign important forms as "Dirty Harry."

For help
Finally, if you need help getting your finances together, TMF Money Advisor is always available to you, and right now you can try it out absolutely free for 30 days. So, give the personal advice line a call, take a seminar or two, take advantage of DirectAdvice's online planning tool, interact with our community -- get it all, free, right now.

In the interest of full disclosure, Robert Brokamp must admit that, right now, in a big box of paperwork, rest the forms necessary to enroll his kids in 529 plans. He promises to make the completion of those forms a top priority... this weekend. This column originally ran on June 20, 2002.