Published in: Buying Stocks | Jan. 29, 2020

Putting Off These 4 Things Will Cost You Thousands

By:  Dana George

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Some of our greatest financial losses are the result of things we put off doing. 

According to the great philosopher Eminem, "The truth is you don't know what is going to happen tomorrow. Life is a crazy ride, and nothing is guaranteed." 

We second that sentiment. We mean to do smart things with our money, but life gets in the way and there are times when our best intentions are pushed to one side. That said, the tough truth about being an adult is that we don't have the luxury of procrastination. The financial cans we kick down the road can end up costing us thousands of dollars. And that's money we could have used when this crazy ride called life becomes more expensive than we imagined it would be. 

Here are four things that it will cost you to put off.

A man looking pensively out the window of a cafe while drinking tea.

Image source: Getty Images

1. Paying off debts

You may be tired of hearing how important it is to pay off debts, but allow us to illustrate the point. Let's assume that you carry a balance of $5,000 on a credit card with an interest rate of 17.30% (the average for January 2020). Let's also assume that you are committed to paying the debt off but are making only the minimum payment. In this case, it's 2% of the balance, or $100 per month. Even if you don't charge anything else to the card, it will take you seven and a half years to pay off your debt, and you'll pay an extra $3,914 in interest. Increasing your monthly payment by $25 will save you $1,407 in interest and will allow you to pay off the balance two and a half years earlier.

Choosing not to pay high-interest debt off as soon as possible robs you in two ways:

  • You pay thousands of dollars in interest.
  • You lose thousands in interest you could be earning by investing the money instead.

2. Shopping for the best deal

Everyone is busy, so it's no surprise that many of us simply buy what we need without shopping for the best deal. It is an understandable but expensive habit. Given the number of online options available to help us find the best prices, it makes little sense to spend more than we have to.

For example, if you're an online shopper, sites like will show you which companies currently offer free shipping, a benefit that can save you a bundle. CouponCabin organizes digital coupons for you so you don't have to clip them. Rakuten offers cash-back rebates for everything you buy through their site, and if you're an Amazon enthusiast, Honey is a free browser extension that compares every seller for the best price on the item you're looking for. It even factors in shipping and your Prime status.

3. Investing

If you've thought about investing but are putting it off until you have a new job, make more money, get married, or any other reason, you are already experiencing what is called "opportunity cost." 

Simply put, opportunity cost refers to the money you could have earned by making a different financial decision. For example, if you decide to buy a three-wheeler rather than open an IRA, that decision will ultimately cost you the money you would have earned through your investment. Or, if you borrow for a vacation and subsequently tie up $30 a month in debt repayment, that's money you can't invest with an online stock broker.

And because of the way compound interest works, the earlier you begin investing, the more money you earn.

4. Refinancing high-interest loans

Interest rates change daily. Ask anyone who bought a home during the Carter administration at 18% interest and you will receive a quick lesson regarding the importance of keeping the rates on your loans as low as possible.

If you have a high-interest loan, the first thing you should do is contact your lender and ask about having the rate reduced. If you have strong credit, there is a chance the lender will want to retain you as a customer and be willing to work with you. If not, shop around for a better loan and refinance your current, high-interest obligation.

Let's say you take out a personal loan for $10,000 at 14% interest. If you pay it back in 60 months, your monthly payment will be $233. If you could instead secure a 7% interest rate on that same 60-month $10,000 loan, you'd only pay $198 a month. While an extra $35 per month may not seem like much, the loan at 14% interest will end up costing a total of $3,980 in interest by the time it's paid off, while the same loan with a 7% interest rate will cost $1,880. That's $2,100 extra you would have to devote to investments. 

It's easy to think of financial mistakes as things we did wrong. In truth, some of the greatest financial losses result from things we simply put off doing altogether.

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