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How to Avoid Procrastinating in Developing Your Financial Goals Thumbnail

How to Avoid Procrastinating in Developing Your Financial Goals

I’d gladly pay you Tuesday for a hamburger today.” —J. Wellington Wimpy 

I used to love watching the Popeye the Sailor cartoons when I was a kid, though my enthusiasm for the show didn’t translate into a love of spinach. However, my love of hamburgers was perhaps enhanced by Popeye’s friend J. Wellington Wimpy and his manic cravings.

Wimpy often said the above-quoted catchphrase about delaying payment for his voluminous hamburger intake. Notwithstanding the credit implications of such a practice, Wimpy displayed a behavior we all understand: I’d rather do something, particularly something unpleasant or difficult, in the future than today. Also known as procrastination

Putting off any task, including one as comprehensive as organizing your financial life, may feel like it saves you stress today. But this approach can ironically cause more distress, and cost you real dollars, in the long run. Follow these ten tips to build the foundation today for a better financial life in the future.

1. Consider the Cost

Retirement can seem like a far-off utopia, something not on your mind as you balance the demands of your career, your family, and your health today. Today’s bills are tangible; those in the future certainly don’t seem so.

But there is a very tangible, and very large, cost to delaying your saving strategy. A study by GOBankingRates showed that waiting until you are 40 (versus starting at 25) to begin your retirement savings will cost you more than $500,000 by the time you reach age 65.

This begs the question — is the time you are spending not planning your retirement worth the compounding dollars?

2. Get Started, Anyway

How many days, weeks, months, years do you think it would take to perfect your personal finances? I have some sobering news — you will never get your personal finances 100% perfect. The minute you fix one issue, like getting proper insurance coverage, a new problem develops, like having to tap your emergency fund for a roof repair. 

Sounds exhausting and defeating. It’s a lot easier, for instance, to let your net savings sit in a bank account each month, rather than find out if you can make a Roth IRA contribution or not, or what is the best stock/fund/investment to purchase for your retirement savings.

But rather than trying to solve the entire puzzle today, what if you spend just five minutes learning how to navigate your investment account screen? Don’t do anything else — just click some buttons.

By making the task small enough you can’t say no, you are on your way to building healthy money habits.  

3. Institute a Fresh Start Day

Ever clean out your desk, or closet, or garage, and feel a sense of accomplishment, order, and motivation in your life? There’s a name for that – the “fresh start” effect.

The “fresh start” effect provides motivation because it marks a division between your imperfect past and a better future.

You can leverage this effect to great… effect. Pick a day in the not-too-far future, hopefully one that has some significance (first day of spring, Tax Day, New Year’s, etc.) and block out time to really dig into the details of your financial life. 

4. Set Specific but Flexible Goals

We all are familiar with the SMART acronym for goal setting. While this approach has merit, to me it feels a little too corporate or antiseptic when applied to your personal finances. Your finances are personal; they aren’t a target listed in a corporate presentation.

We can still be smart (pun intended) about how we plan our personal finances. Rather than saving “I need to save $1mm by the time I am 65,” choose a smaller, more immediate goal. Could you commit to saving an extra $2,000 this year? If this still feels too nebulous, what about an extra $200 a month?

This specificity then also allows for flexibility. If $200 a month seems too tight after trying it for a couple of months, lower that goal to $150. How does that feel? You can make immediate adjustments to fit your lifestyle while also hitting on goals that lead you to the long-term outcomes you want.

5. Focus on One Task at a Time

We call this bite-sized financial planning and it’s a strategy we employ with our clients.

If I said you needed to update your homeowner’s insurance, consolidate those old 401(k)s into a single account, make a change to your upcoming year’s health benefits, and also classify your spending into core versus discretionary categories… you would likely look at me sideways and do none of the above.

There are always things to do on the financial planning front. So, rather than eat the pie in one sitting, take a small bite and see how it goes. Then next month, focus on completing another new task. You will be amazed at how much progress you can make on the financial front by focusing on one item at a time.

6. Put It on Your Calendar

I don’t know about you, but I live by my calendar and to-do lists. If it’s not on either one, it doesn’t exist. 

Treat your bite-sized financial tasks the same way, leveraging your need to check your phone’s notifications (I am equally as guilty, myself). 

If you wanted to change your 401(k) savings rate but aren’t sure how to navigate the clunky user interface, block out 15 minutes to call your HR department or 401(k) service provider. Ideally, you should schedule these tasks sooner than later, so you can keep iterating on your smaller goals.

7. Automate Everything

Hopefully our lives never run quite as smoothly as they do in WALL-E, but there is a big benefit to automating the little things in our life.

For instance, some employers allow you to automatically escalate your 401(k) contributions each year, saving you from the difficult choice of optimizing your salary savings versus your current consumption. 

There are also financial apps to help you build a better savings mousetrap. We reviewed many of these platforms in an earlier blog post, from cash-flow management apps to robo-advisors to cybersecurity tools.

8. Get a Money Buddy

Accountability is key. According to a study published by the Society of Behavioral Medicine, participants who paired up with a virtual partner biked an average of nearly 87 percent longer than those who rode solo.

The same concept applies to your personal finances. A “money buddy” can be a soundboard for your financial goals, getting them out of your head and onto paper. They also can be an accountability partner by holding you to task through regular check-ins.

9. Reward Yourself

Have you ever negotiated with yourself? If I just finish this last workout set, I can get that smoothie. If I clean up the family room, I can watch that 20-minute show.

While it may seem childish — I try to bribe my son with the same tactics — they undoubtedly work. In fact, I have an episode of The Office queued up as a reward for finishing this blog.

Combining your bite-sized goals with periodic rewards is a powerful combination. This way, you don’t feel like you are constantly working on a project that seemingly has no end in sight, keeping your focus fresh and your motivation high. 

10. Don’t Miss Twice

The Seinfeld Strategy. Basically, creating a visual tracker of the repeatable tasks that you need to complete is a fantastic way to build better habits. This, of course, can apply to more than just your finances, but seeing how many times you hit that $200 monthly savings goal can give you the push you need to keep going. 

It’s OK to not hit your goal with machine-line precision and perfection. We will slip up from time to time, but this shouldn’t discourage you or cause you to completely stop. How do you make those situations better? Don’t miss more than once. 

Financial Planning with Harbor Crest Wealth Advisors

Creating a better financial future for yourself and your loved ones doesn’t require a herculean effort or an elaborate playbook. It’s a matter of focusing your energy on the right tasks at the right time. But putting off proper financial planning can create more stress and cost you real dollars in the long run.

If you would like to learn more tips on how to build your better financial future today, sign up for our newsletter.