Don’t put off until tomorrow what you could do today
When managing finances, procrastination can carry a big cost. A research paper issued by the Financial Services Authority in the United Kingdom in 2008 identified procrastination – or putting off acting – as one of the main problems associated with saving and investing. In addition to the tendency to postpone “an unpleasant task” day after day, it says part of the reason for procrastination are less mindful of consequences the further they occur in the future. In other words, we prefer to think about the present rather than the future. The eZonomics poll that asked “which would you choose to get €50 now or €55 in a year?“ details this idea – known as hyperbolic discounting – more fully. People might not even recognise that they are putting off a financial decision – not planning for retirement, for example, is doing exactly that.
Cut procrastination by getting started
A good way to battle procrastination is to simply get started. The video tutorial How much should I be saving? and the ING USA retirement calculator Your Number. Schedule time in your diary to work on your finances and stay focussed. Such steps are recommended in the Psy Blog as a way to ward off procrastination by thinking in “concrete terms”. If you need extra help setting deadlines and are technologically savvy, perhaps consider the “Procrastinator” mobile phone app designed by author and behavioural economist Dan Ariely. Dubbed an app for tough decisions, it aims to counteract the theory that “when we are choosing between two or more very similar options, we tend NOT to take into account the consequences of not deciding”.