In my blog post dated February 27, 2018, we addressed the fifth of six roadblocks to creating a financial plan: Taxes. I wrote about how tax planning is a critical factor in the planning process, and that almost all financial decisions have a tax impact. Here is a link to that post - Roadblock Taxes.
The sixth and last roadblock may be the most difficult to overcome: Procrastination. Some people never quite get around to planning for the future. As a result, they fail to reach their financial goals. Procrastination will sabotage your financial future if you let it take the steering wheel.
Dealing with finances involves thinking about the future, addressing current problems, perhaps making spending cuts, and talking about money. Essentially, lots of things we would rather avoid doing. Let’s face it: creating a financial plan seems like a monumental task for most individuals. In fact, part of the reason why we keep delaying action is because procrastination is a coping mechanism—it provides a temporary reprieve from an emotionally difficult task.
If you find yourself worrying about money, begin by pondering three questions.
1. How sustainable is my current lifestyle? You may be living a champagne lifestyle on a beer budget. Here are things to look at to see if you are leading a lifestyle that is not maintainable.
* Using credit cards and not paying the balance off monthly
* Keeping up with the Joneses
* You feel a sense of entitlement
* You cannot distinguish your needs from your wants
* You spend money without a thought
2. How comfortable would I like to be in the long run? Would you like to travel the world, dine out regularly, buy a new house in a retirement community (or one at the beach) and feel free to buy what you want, when you want it? What will you want to spend money on in retirement? All the above questions, and more, will play a role in determining what you will need to retire comfortably.
3. Am I willing to live with the stress that financial uncertainty is causing for me? Too much debt, not enough money, kids, marriage and the list can go on. There are a lot of reasons that you may be feeling some financial stress. It is one of the largest stressors on relationships. When you are stressed out it affects other aspects of your life. You may have a hard time concentrating on work or completing tasks at home or focusing on your relationships because you have financial stress hanging over your head all of the time.
As with any challenging endeavor, you do not have to create your financial plan alone. You can get support from our team at Petra Financial Solutions. We have the experience to think through financial decisions with you and are able to help you design a process to reach your goals.
You will find that we can act as a catalyst to push your financial situation past costly procrastination into a more secure financial future for you and your family. That is the ultimate benefit of pushing the “Update now” button on personal finances. We can help you with Financial Planning but we cannot take the first step for you.
Financial procrastination is expensive. Act today, and your future self will thank you.
Until next time, cheers!
Jim
* Sources:
Kiplinger “The True Cost of Financial Procrastination”
Money Mentalist “Living a Champagne Lifestyle on a Beer Budget?”