Procrastinating on Money Matters
Simple and effective ways to manage your personal finance timely
The other day, just like at the first half of every month, my bank and investment statements landed in my inbox. I knew I should open them and take a look but as usual, I scrolled right past them telling myself that I was too busy and tomorrow would work just fine. I’m a finance professional so numbers don’t intimidate me at all—in fact I’m well aware of just how important these jobs are. But still, whenever the time came to tackle the little tasks that add up to managing my personal finances, I inevitably behave in this inexplicable manner.
Much like Becky Bloomwood in the bestselling book, Confessions of a Shopaholic—about a young retail addict who dreads looking at her credit card bills because of her crippling debt trap—I tend to avoid reading bank statements and filling out forms despite not having a spending problem. I do eventually get down to it but I invariably put it off as long as possible.
I learnt my lesson the hard way when I discovered a few months too late that one of my accounts had been classified as dormant due to inactivity and needed some steps to be completed in order to revive it. I had of course missed this because I skipped the email alerting me to the issue.
Procrastinating on personal finance matters is not without consequence. While putting off things like filing tax returns may be okay as long as they get done by the deadline, routinely late credit card payments and delays in saving for retirement could spell disaster. If you're like me and keep putting off tackling the many little parts that make up managing personal finance, here is what helps me stay on track.
Getting to the root of it
I started by doing some serious introspection to understand the reason behind my unwillingness to do these seemingly simple tasks. I realized that for me it was simply a matter of perceiving the jobs to be boring and time consuming. The fallacy in this line of thinking was that the more I put off the job, the bigger, more
worrisome and stressful it became, and much more of a headache. This also meant it took longer and more effort to get done by the time I forced myself to deal with it. Tackling the task immediately, saved me much more hassle.
For me, electronic reminders and apps did not do the trick. I would simply turn off the reminder and continue reading something more ‘interesting’ on my phone. What did work was getting someone to ‘nag’ me. I enlisted someone in my inner circle to keep checking with me and reminding me at regular intervals. If you have enlisted the right person for this task, this can be very effective. Don't pick someone who will easily back down if you offer an excuse. You need someone firm, unafraid and committed to the cause.
Some of us work well under pressure and manage to pull things together more efficiently with a deadline looming large (like tax returns). To capitalize on this, I set a deadline for myself and informed the recruited ‘nag’ to not let me forget this.
Plan for it
When there is a task that we don't particularly enjoy, there will always feel like something else needs our time and attention. To avoid getting sidelined by your own unwillingness, earmark a day and time dedicated solely to handling money matters on a regular basis. I consciously pick a time when there is little to no chance of being busy so I don't outsmart myself and postpone the activity yet again.
Clearly identifying and quantifying financial goals such as saving for retirement, children’s education, buying a home etc. can give our efforts the focus it needs to stay motivated. If we aren't clear about our goals and haven't made the time or effort to articulate them, it can be even easier to lose our way and put things off again and again until there is a crisis.
Choose automated options if any of the tasks you need to do allow for it. From bill payments to adding deposits into savings, many such regular monthly tasks can be set up to go directly out of your bank account periodically. It’s truly a blessing for people like me who are bound to lose momentum after the initial enthusiasm.
If it gets overwhelming
Sometimes, the thought of saving for retirement or some other goal may seem overwhelming and it may be hard to pinpoint where to start for some of us. If that is the case, it may help to enlist a trusted advisor or a professional who can help break it down into smaller, less intimidating chunks that can be managed easily and set you on a guided path that feels less scary to navigate.
We all have different weaknesses that distract us from what we should do. I found that whenever I tried to do any of these tasks on my phone, it was very easy to get carried away by, say, a Facebook notification telling me a friend had made brownies. Before I knew it, I was in my kitchen baking instead of completing the task I had started on. However, if I sat at the computer, I was more focused, in work-mode. Identify what distracts you and outsmart the distractor.
What do you have to lose?
One thing that works really well for me is to identify in clear monetary terms, the downside of not acting on time—approximately with a back-of-the-envelope calculation. Finding out exactly how much money you lose on interest due to a missed investment or renewal or the possible penalty on a credit score or the fines to be paid on a late payment, will really drive home an accurate picture of the real impact of not acting on time.