Some people have a talent for sports, while others are good at business. But everyone, it seems, has a genetic predisposition to procrastinate!
The problem is, when you procrastinate on important financial things in your life, it costs you money.
If, every time you put off something, a man in a dark suit showed up and demanded money from you, you’d call the police! Well, essentially, that’s what you’re doing — forking over money to other people.
So let’s make a pact here and now to stop procrastinating on important things in our lives that are costing us money or quality of life. Here are seven things you need to stop putting off — and where to start.
1. Paying off your debt
“The longer you take to pay down your debt, the more interest you are paying,” said Lisa Dworkin, author of the personal-finance blog “Lisa Dworkin’s Blog” and the text book, “Become a Money Master.”
“It hurts you because it costs you money,” she said. “It costs you money either by paying more interest on debt than you need to or not getting as good a return as you could because your money isn't invested (in something) — or both.”
And remember, interest works both ways: It costs you money on your debt, and makes you money on your savings.
“Interest rates are at record lows so now is the time to accelerate debt repayment,” said Greg McBride, a senior financial analyst at Bankrate.com.
In other words, if you put that money toward savings, it wouldn’t make that much money for you. Better to repay your debt at a faster pace now, when rates are low, before rates go up and it starts costing you more money.
If you have a lot of debt, Dworkin advises breaking it down into pieces. That way, it will seem more manageable. Tackle one small part at a time and before you know it, it will be paid off. It’s generally advised to pay off the debts with higher interest rates first but you may want to tackle a small debt (in terms of the total amount) first — you’ll pay it off quicker and it will give you a shot of confidence to keep going and pay it all off.
The bonus, McBride said, is that paying off your debt puts more money into your household budget — or your portfolio.
2. Refinancing your mortgage
While we’re talking about record low interest rates and the fact that they won’t stay low forever, let’s talk about that little thing called YOUR MORTGAGE.
For most people, the mortgage is your biggest monthly payment, which means it’s a no-brainer: If you only have time to renegotiate one thing — make it your mortgage.
“Money will never be this cheap again,” said Brandon Ross, the senior vice president and branch manager of Peak Capital Investment Services in Dallas. And refinancing at these low rates can cut your monthly mortgage payment by $200 per month or more, he added.
The operative phrase is “per month,” which means you’ll have $200 or more to spend EVERY MONTH.
Not only do you want to get in on the refinancing craze before rates start moving higher but you also want to do it before some major life event like job loss, income reduction or another drop in housing prices.
“Any of those could prevent qualifying for a refinance, regardless of how low mortgage rates might be,” McBride explained.
3. Looking for a new job
Less than half of American workers — and those are the ones lucky enough to have jobs in this economy — are happy with their jobs, according to the Conference Board.
Maybe you’re unhappy with your current career path or maybe you feel like you’re underpaid. Either way, this is one important thing that you need to stop procrastinating now.
First, job stress takes a huge toll on your health — from increasing your risk of heart disease to compromising your immune system … and your ego!
“Procrastination can lead to stress, illness and low self-esteem,” said Matthew Rothenberg, editor-in-chief of TheLadders.com and co-author of “You’re Better Than Your Job Search.”
And second, you don’t want to wait until you’re unemployed to look for a new job.
“The time to look for a new job is when you have a job,” said Al Lee, aka “The Salary Doctor,” at PayScale.com.
The reason is simple: It’s like dating — you’re always more attractive when you’re with someone (or a company) than when you’re single (or unemployed)!
Not only are you a more attractive candidate, but it puts you in a better position to negotiate, Lee says. A prospective employer knows that “you can always stay where you are.”
So where do you start? Rothenberg says define what you want from a job and craft your “elevator pitch” — the one-minute version of why they should hire you. Then, make sure everything from your cover letter to your clothes “reflect your tagline.”
And perhaps most importantly, he says, you have to commit — set aside time for your job search.
“There are many reasons WHY you may be procrastinating, but none of them are good excuses,” he said.
4. Rebalancing your 401(k)
When it comes to your retirement savings, you’re not just losing money now, you’re losing money for life!
As you keep dumping money into your retirement savings the various mutual funds and other investments it’s going to will grow at different rates. That means, the balance you initially set up (what percentage of your retirement money you want where) can get out of whack — and that could bump up your risk level and ultimately cost you a lot of money.
And if you lose too much — you run the risk of running out of money when you retire. That may not seem important now, but when your retirement account becomes your source of income — it will quickly become apparent how much it matters.
“If you procrastinate, you’re not doing enough planning to have a suitable retirement or be able to keep the same standard of living as you’re accustomed to,” Ross said.
And it doesn’t require that big of a commitment either: McBride said rebalancing once or twice a year should be sufficient.
5. Updating your will
It’s never fun to think about death — particularly your own. But maybe this will guilt you into it: If you procrastinate updating your will, it will hurt your loved ones most of all.
You have to update a will after every major life change, everything from marriage to divorce, the birth of a child or death of a loved one.
If you don’t straighten out what you’re leaving to your spouse or children, it will cost them a big headache trying to get what’s rightly theirs — not to mention a lot of money in legal costs and potential tax penalties.
And if you don’t do it — guess who will?
“The government will do it for you,” said Stacy Francis, a personal financial adviser and founder of Savvy Ladies, a group aimed at educating women about money. “And you may not like how the government divvies up your assets.”
And don’t just update your will — update all of your major policies — 401(k)s, life insurance, etc. — with the new beneficiary.
This becomes even more important if you’ve been married more than once.
“If your will says, ‘my mutual fund goes to my wife’ but the beneficiary listed with Schwab is your ex-wife, guess what? It’s going to your ex-wife,” Francis cautions.
If a loathing of lawyers, high legal fees — or both — are holding you back, you can draw up a will online in about a half an hour using a site like Nolo (www.nolo.com) or Legal Zoom (www.legalzoom.com) for less than $100.
6. Backing up your computer
From death, we move to your lifeline — your computer. You know how frustrating it is to have Word crash on you and you lose the last few hours of your work — what if your whole computer crashed and you lose the last few years of work? Not to mention the last few years of personal memories as most people keep all their personal photos on their computer.
So make a plan now to back up your computer.
If you’re at a loss for how to back up your entire computer, start small: Buy a peripheral hard drive — it can be a big box or a small thumb drive — and start backing up your photos and other important files.
If you need some extra motivation, pretend there’s a fire and you only have 15 minutes to save the stuff you absolutely can’t live without. Consider putting it in a safety deposit box or somewhere other than your home — if there really is a fire, you don’t want to have your computer and your backup both go up in smoke!
Also, when your computer asks you if you want to back up your computer, you should say yes 99% of the time (we’ll allow a little slack for when you’re short on time). Your computer is trying to help you — don’t work against it!
OK, that was the quick fix in 15 minutes or less. Step two: Buy software or an online program that will back up your entire computer. PC World recommendsGenie-Soft Backup Manager ($50-$70), the cheaper Argentum Backup ($25) or for online backup, Mozy Home, which for $5 a month will automatically back up your entire hard drive.
7. Decluttering your life
You may not think that pile of junk mail is as important to address as your will or 401(k) — but it is.
If you have a lot of clutter lying around, it creates stress on you which can, plain and simple, affect everything from your productivity to your health. Not to mention, your money.
“Decluttering is rarely fun but procrastination can lead to a real downward spiral as clutter tends to multiply itself and seems to become increasingly overwhelming,” said Megan Cairns, owner of Organization Concepts and Design in Manchester, NH.
She recommends making a list of everything you want to declutter and then tackling one small area at a time. That makes it much more manageable — and enjoyable.
Take time at least once a week to go through your mail — separating the bills and shredding /recycling the junk mail. Be honest with yourself: If you haven’t used that treadmill in years, sell it on Craigslist and use the cash — and the space it opens up — more wisely. That goes for the furniture you inherited from grandma, too. Better to keep a few favorite items, than piles of stuff that are gathering dust — grandma wouldn’t want you to live that way.
Chuck most of your recipe books except for your absolute favorites — just about every recipe you need (except maybe grandma's pierogi recipe) is online. And do a closet purge a couple of times a year — Be honest with yourself about how often you really wear that sweater and whether those pants will really still be in style by the time you lose weight. Divide the stuff in to three piles — keep, sell and donate.
So which area should you tackle first? Start with one that you’re in a lot, whether it’s the couch, kitchen or your office. You’ll notice a huge difference in the way it makes you feel — lighter, more relaxed — to have more space than stuff when you’re trying to work or relax.
And that goes for your computer, too — if you have too many icons on your desktop or too many photos of the same thing, start to pare down.
Beyond the literal selling of your stuff, decluttering can save you money.
You know what they say — “Time is money.”
“As you spend your time searching for misplaced items, you are losing the opportunity to accomplish other objectives!” Cairns said.
OK! On your mark … get set … stop procrastinating!