Ever wonder what makes some people planners and some people procrastinators? Do you ponder this every year on April 14 at midnight while you're furiously trying to complete your tax returns?
When it comes to your personal finances, procrastinating can be costly. Put off saving for retirement and you'll struggle to catch up with all the planners who started early. Put off paying your credit card bills and you can end up with costly late fees, interest charges, and higher rates. Put off paying your taxes and you'll be more likely to overlook money-saving deductions.
That doesn't mean the procrastinator must be doomed to a life of poor credit and missed deadlines. Science has uncovered some of the reasons why people tend to procrastinate. According to a study published in Psychological Bulletin and profiled by LiveScience, procrastinators have certain traits in common. Take a look and see what you can do harness your procrastinating ways and make them work for you.
Impulsiveness. The average procrastinator tends to live for today, not defer gratification until tomorrow. They celebrate the moment. While that could make procrastinators some of the happiest people around now, it will make them some unhappy retirees.
An antidote to impulsiveness? It's an oldie but goodie -- pay yourself first. Get the money out of your sights and put it someplace you can't easily reach. Try taking advantage of your 401(k) or other workplace retirement plan. Set up an automatic savings withdrawal to fund an IRA or an online savings account. If you use your local bank for savings, turn down offers to link your savings account to your ATM. Make the money disappear; then your impulsiveness will not threaten your long-term goals.
Confidence. Procrastinators, on the whole, tend to have less confidence than your average planning personality that they can complete a task. As a result, they just don't get started.
Take on this tendency in two ways. First, you've come the right place if you want to know how to get started. Dive into any of The Motley Fool's personal finance centers and you'll find step-by-step instructions for taking on and achieving your financial goals.
It might also help to break your big tasks up into more bite-sized chunks, something those planning types probably do instinctively. You can get some tips from organizational guru David Allen, who passed on some of his tricks to the Motley Fool Green Light newsletter. Read some excerpts here.
Deadlines. Procrastinators need deadlines. They thrive on them. They may put off everything until the last minute, but when the last minute arrives they work like lightning. Harness all this energy by giving yourself deadlines to complete your financial tasks. Even if you still wait until the last day to get the task done, you'll get the task done.
Try setting out a few deadlines at a time, so that if you run over one, you'll feel the pressure of the next one approaching. Take advantage of your impulsive nature by awarding yourself lots of free time to goof off once the deadline's been reached. Build in some accountability by writing the deadline on the kitchen calendar, giving your spouse permission to ask about your deadlines, or making a promise to take the kids out hiking the day after your deadline.
Boredom. Sometimes we put things off simply because they're boring or hard, and we're just not really interested. If you're not naturally inclined to care about abstract money matters, this may be the root of your problem. In that case, try to turn the abstract stuff into something concrete that you care about.
So, instead of starting your retirement planning with computations involving inflation, savings rates, and portfolio returns, begin by thinking about the kind of life you want to lead in retirement: your dream house, your hobbies, your travel. Instead of becoming consumed by projections of the cost of college, start your education savings plan by thinking about the kinds of values and goals you want your children to have when they leave home. Figure out how to trick yourself into getting interested in the financial nitty-gritty.
Get really good at these tricks, and you might even be able to teach the planners a thing or two about living for today and setting deadlines.
Motley Fool Green Light has money answers for your money questions. Advisors Shannon Zimmerman and Dayana Yochim spend each issue telling you how to save more and invest more for your future. Want to see their latest advice? A free, no-obligation trial is yours for the taking.
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