10 ways procrastination hurts your bottom line
We all put things off, and we often get away with it. Perhaps we don’t have the time or energy, the know-how or the confidence to deal with the task at hand. Maybe we dislike the task, or we’re simply impulsive and get distracted by more pleasurable things — like watching TV or playing computer games.
Regardless of the cause, all this procrastination comes at a hefty cost, warns author Piers Steel in The Procrastination Equation. It could be as small as a late fee or something as big as failing to plan for the future. Why we give in to procrastination — and how to overcome it — is a complex issue, but understanding the consequences can give us a push in the right direction.
Here are some ways procrastination could be hurting your finances.
Also known as “stupidity fees” in the personal finance world, they’re the penalties we pay because we didn’t do something when we were supposed to — like not paying a bill on time or failing to cancel a free trial before we have to pay. We might also put off cancelling services we no longer need, or find it hard to get around to reviewing our regular expenses (like insurance policies or phone services) to make sure we’re getting the best deal. While not financially devastating, these extra costs still sting because we didn’t need to pay them at all.
Beware: procrastinators even lose out at tax time, says Steel. In a rush, we’re more likely to forget a deduction or make a mistake that delays our tax return. Believe it or not, some procrastinators end up paying late fees because they overlooked one simple detail: signing their return.
Hardships in the job hunt
While unnecessary fees are annoying, procrastination’s place in the workforce is far more costly. Even from the get-go, people who procrastinate are at a disadvantage. Job hunting can be time consuming and discouraging, but people who delay have a harder time finding work, whether they’re newly out of school or newly unemployed.
Not surprisingly, Steel notes that people who procrastinate in the job hunt stay unemployed longer. Meanwhile, savings or credit cards are paying the bills, and many people are going without benefits like insurance and drug coverage that many employers offer.
Poor work performance
What about the currently employed? Steel notes that innovation and “out of the box” thinking takes time. While many people think they work well under pressure, Steel notes we’re more insightful and creative if we start projects early. We may not know it, but performance decreases the longer we delay. A strong performance at work is essential for getting ahead — and sometimes keeping a job.
Cumulatively, companies pay a heavy price for their workers’ procrastination. People aren’t always wasting time chatting or “cyberslacking” — they’re also distracted by the small things like answering an email or handling a mundane task. It isn’t just the momentarily delays that hurt, says Steel: productivity studies show it can take up to 15 minutes for a distracted worker to get back on track. That adds up to a lot of unproductive hours in a year. When your team members — not to mention your managers or CEO — fall prey to procrastination, everyone feels the pinch.
Lack of career success
Getting stuck in a rut can hurt us in the workplace too. Many people put professional development on the backburner and wait until they “aren’t so busy” to pick up this or that skill. Unfortunately, “later” becomes a moving target and people lose out on gaining the expertise that could give them an edge in the workplace — or give their company an edge in the marketplace.
Another worry: we often neglect networking when we aren’t job hunting. However, building strong networks is crucial for tapping into that “hidden job market” of opportunities that never get advertised or posted.
Procrastination isn’t just the enemy of the unemployed. Steels warns that same distaste for job hunting can keep employed people from getting ahead. It can keep us from applying for promotions, negotiating our salaries and searching for better opportunities — all of which would could result in more income.
Lack of self improvement
Not meeting our career goals isn’t the only thing that could cost us money. According to Steel’s research, many areas where people procrastinate involve self-improvement — like education, diet and exercise, breaking bad habits and adopting good behaviours.
Procrastination could also keep people from getting help for financial difficulties or developing a retirement plan — costing them both in the present and future. Many of our bad habits affect our budgets too — like smoking (both unhealthy and expensive) or not tracking our spending.
Racking up debt
One thing procrastinators don’t put off is gratification. It’s the impulsive trait that gets people into trouble. Spending is the fun part, but actually paying for purchases? That can wait. Statistically speaking, Steel notes that procrastinators are more likely to have revolving credit issues. People who are impulsive also have a harder time delaying gratification, and would rather have a small reward now than a greater one in the future.
If “spending tomorrow’s money today” sounds familiar, Steel notes procrastinators are in good company. Governments are very good at it too, and we’re seeing the results in the debt crises many countries are facing. Worse yet, governments often don’t have the cash for the “quick fixes” they make — leaving the debt for the future.
Putting off saving for retirement
Economic roller coasters aside, studies shows that we make more financial headway saving for retirement early in our careers than trying to catch up in later. (Compound interest, anyone?) For many people, the far-off goal of retirement wasn’t as immediate as buying a home, raising kids, paying for their education, going on vacation, etc. It’s one reason why the baby boomers and following generations will be working a lot longer than expected.
Steel warns that when we put off saving for retirement — or updating our current retirement plans — we aren’t just hurting our future selves. We’ll be counting on other sources like a government pension to make ends meet. Steel isn’t alone in warning that both company and government plans could be headed for a crisis.
Not preparing for emergencies
We know retirement is coming — but what about those emergencies we don’t expect like a disability or major repair? Retirement funds aren’t the only savings people put off — emergency funds or “rainy day” funds are also taking a hit. We might delay getting life insurance or disability insurance, or think long-term care insurance is something to deal with decades from now.
The result? Many people are forced to rely on credit when the unexpected happens, and compound interest makes a stressful situation even more costly.
Greater health costs
Another inevitability: the older we get, the greater our risk for chronic health conditions like diabetes, heart disease and cancer. Perhaps we can’t avoid them altogether, but we do know that our lifestyle choices make a big difference in preventing, delaying and managing these conditions.
Yet we put off getting more exercise, and it’s easy to delay eating well when a tasty treat is right in front of us. We skip regular check-ups and routine screenings, and we delay getting treatment for symptom we have. Recently we heard that one in 10 Canadians struggles to afford medications — and that’s just the tip of the proverbial iceberg. When you factor in opportunity costs, caregiving, lost productivity, equipment and other out of pocket costs, poor health can be very expensive. (Not to mention the health care costs we’ll face as tax payers.)
A lack of end of life planning
Do you have a recent will and plan for future care? Do you know what your loved ones want “when the time comes…”? They’re difficult questions, and many of us don’t like to think about death let alone put plans in writing.
Sadly, if we don’t make these plans, we’re leaving crucial decisions in someone else’s hands. Someone else will decide our future care when we’re not of sound body or mind to be involved. If we don’t have a will, our estate will be divvied up according to law, not according to our wishes — sometimes at the expense of loved ones or causes we care about.
The bottom line? It may sound trite, but there’s no guarantee we’ll have “tomorrow” to tend to the things that are important to us — like saving, taking care of our health and strengthening our relationships with loved ones. Whether you embrace death as a motivator like Steve Jobs or Stephen Garrett, it can help us clarify our priorities — and we’re willing to bet playing solitaire won’t be among them.
Curious about how to overcome procrastination? We won’t leave you hanging too long — watch for our follow-up article in our next Lifestyle e-newsletter. (Sign up for our newsletter or follow us on Twitter.)