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Put off these money moves at your own peril

Time really is money if you're procrastinating on financial matters.

More than half of consumers say they are currently putting off a decision or action related to money, according to new data from OnePoll and Fidelity. The survey queried 2,000 adults in November, with a margin of error of plus or minus 2 percentage points.

Among the most-delayed tasks: Saving for retirement, paying bills, creating a budget and doing your taxes.


One third of procrastinators say they have already gotten into financial trouble due to their delays. Here's how the costs add up for commonly avoided money tasks:


Paying a bill

Late fees are nothing to sneeze at, especially if you're a repeat offender.

"It's costly," said Greg McBride, chief financial analyst for Bankrate.com. "You could easily get socked with a $25 late fee, or more, on credit cards."

Effective January 2017, the maximum fee for repeat late payment on a credit card is $38, per the Consumer Financial Protection Bureau. Bigger loans carry even bigger fees — on mortgages, a late fee is typically a percentage of your monthly payment, said McBride.

"You also have to worry about the collateral damage that comes from being late," he said.

Penalty interest rates may kick in on credit cards if you're habitually late. Late payments can also be noted on your credit report, he said, which will lower your score and make it more expensive to borrow in the future.

Doing your taxes

Depending on which part of the process you're stalling on, you might face failure-to-file penalties, failure-to-pay penalties or both, said Melanie Lauridsen, tax technical manager at the American Institute of CPAs. If you're required to pay estimated taxes, but haven't kept up, you may also owe an underpayment penalty.

Failure-to-pay will typically cost you 0.5 percent of unpaid taxes for each month or part of a month your bill remains unpaid after the filing due date. The failure-to-file penalty is more expensive, at 5 percent of unpaid taxes for each month or part of a month that your return is late. (If you're subject to both late-filing and late-payment penalties in a given month, the maximum total penalty for that period would be 5 percent of unpaid taxes.)

There's another risk of dragging your feet on preparing your return: fraud. The Internal Revenue Service estimates that in 2014 (the most recent year for which data is available) it prevented $22.5 billion in attempted identity-theft tax fraud — but paid out $3.1 billion in fake refunds.

"Identity thieves, the name of the game is speed," Lauridsen said. "They're going to hope you didn't file early and their return can get in front of yours."

Buying life insurance

If you need life insurance, the longer you delay, the more you'll pay — essentially, because your risk of dying increases with age. Delays tend to be more costly for term policies, as well as for older applicants, said Steven Weisbart, a senior vice president and chief economist for the Insurance Information Institute.

"Because the chance of death is really quite small at the ages where people would begin to think about buying life insurance, delaying from age 25 to 30 wouldn't raise the rate a lot," he said. "Even at 30, we're talking about people who rarely die."


A 2016 ValuePenguin.com analysis found that average term rates for a 20-year, $250,000 policy are just $4.21 per year more expensive if you apply at age 30 ($334.54 total) instead of 25. Apply at age 50 instead of 45, and you'll pay $299.49 more per year ($918.91 total).

At any age, delaying also comes with the risk that you'll develop some condition in the interim that could make you less attractive as an insurance risk, Weisbart said.

Saving for retirement

Putting off saving for retirement costs you now, in the form of missed free money from your employer match. But the bigger miss of waiting on saving for retirement is that you forgo the benefits of compounding, said McBride. Your money has less time to grow in the market, so hitting a particular financial goal will require saving more or retiring later.

Someone planning to retire at age 62, and starting to save at age 25, would need to save 15 percent per year to adequately replace his or her income in retirement, according to a 2014 report from the Center for Retirement Research at Boston College. Start at age 35, and you'd need to save 24 percent per year to meet that same goal, they estimate — or save 15 percent but delay your retirement to age 65.

Already saving? You're not off the hook.

Waiting until the last minute to make IRA contributions can be costly, too. A 2014 Vanguard study estimated that over a 30-year career, investors routinely contributing $5,500 at the end of the tax year face a $15,500 "procrastination penalty" in lost earnings, compared to those who make their contribution early in the year.


Creating a budget

"Budgeting is the hub from which a lot of these other [tasks] come from," said McBride at Bankrate.com.

If you don't have an understanding of where your money goes each month, he said, it's not surprising that you might be short on cash — and as a result, delaying paying a bill or saving for retirement.

There are plenty of ways not keeping tabs on a budget can cost you. Subscription management site Truebill, which helps consumers monitor and cancel recurring charges on their credit cards, found average annual savings of $512 for users who had cancelled a membership. NerdWallet estimates that the average driver overpays for auto insurance to the tune of $368 per year, from not shopping around for better coverage.

Not balancing your budget could also generate credit card debt, said McBride. That can quickly add up, with Bankrate.com putting the average reward card APR at 15.48 percent.