Home > Personal Finance > 5 Ways Procrastination Costs You Money

Comments 0 Comments

I recently switched my family’s cellphones from a major national carrier to a smaller provider to save money. Purchasing the phones upfront set me back several hundred dollars, and perhaps it was because I was feeling the pinch of that major purchase, or maybe it was sheer laziness, but I procrastinated on buying cases for them. I thought about it a number of times, and meant to go online to shop, but two weeks later I still hadn’t done it. Then I dropped my phone and shattered the screen. It cost me at least $100 — twice the cost of the sturdy case I ended up buying after the fact — to get it fixed.

In short, procrastinating cost me a fair amount of money, and it’s not the first time that’s happened.

In fact, once I started thinking about it, I discovered I could recall a horrifyingly long list of ways I had thrown away money by putting off essential tasks. But at least I am not alone. When I polled friends and colleagues, several quickly rattled off their own experiences.

Why do we avoid taking care of important tasks at our own expense?

“Fear is the number one reason people procrastinate about money,” says Certified Martha Beck Life Coach M.C. Coolidge. “We think we procrastinate because we’re too busy, the kids have homework, the dog needs to be walked, we can’t find the calculator, or we’re just feeling lazy. But what’s really going on is, we’re so frightened we’re frozen in our tracks.”

More on how to fight that fear in a moment. In the meantime, here are five ways this tendency to put off the things you know you need to do can cost you dearly:

1. Penalties Add Up

My friend Barbara Brockway seems like one of the most disciplined people I know. Her careful spending allowed her family to pay off their mortgage years ago, and she’s written a novel (something easy to put off until tomorrow!) while working and raising a family. But she, too, confesses that, at times, she can be the “queen of procrastination.”

“There was the time when I forgot to pay the electric bill, and when we came back from vacation we found a freezer full of spoiled food and dead fish floating in the fish tank — yeah, it was bad,” she says. “There was a $50 re-connect fee, crying children and an extra night of no power, just for good measure. I found the disconnect notice in a pile of unopened mail lying on the kitchen counter.”

Reconnection fees, late fees and other charges can make a small bill mushroom into a much larger one. I once was charged a $400 fee for failing to renew my corporation’s annual filing with the state on time. The original bill was $150 and I had the money to pay it. I just put it off and then “forgot” about it.

Other ways penalties can cost you:

  • You fail to return a book to the library and your “free” book winds up costing you more than if you just bought it in the first place.
  • You are late making a credit card payment — even by just a day — and you will likely be charged a $25 late fee (unless you happen to have a no-fee credit card). Worse, if you fail to pay it before the next month’s bill is due, you will likely wind up with a late payment on your credit reports that can cost you a small fortune in additional interest.
  • You let your license plate or tags expire and get an expensive ticket. 

2. The Devil’s in the Details 

As founder of the nonprofit organization Women’s Money, Gina Robison-Billups spends many of her waking hours focusing on ways to help women make the most of their money. But she learned the hard way that bargain hunting sometimes carries a price:

“I lost a TON of money because Southwest airlines changed their policy on no-shows, and now you lose your money if you are a no-show,” she laments. “This is where I did get in budget trouble because I booked four months of advanced travel to get the best rate, thinking that I could be a no-show if the trips had to be canceled and I would at least have travel funds left. I was left with nothing…no vouchers, no money. Painful lesson,” she says.

All the bargain-hunting in the world won’t save you money if you neglect to notice the details in the fine print. Have you ever been hit with:

  • Early termination fees for cellphone, cable or Internet services you canceled? (Or worse, have you been billed for utilities or other services you weren’t using because you failed to cancel them?)
  • Auto renewal for subscriptions or annual services you forgot about?

3. An Ounce of Prevention

“The last time I saw my dentist, he told me that if I came in sooner that cavity wouldn’t have turned into a root canal,” says Susan Nilon. She has plenty of valid excuses for neglecting to take time out for routine appointments; after all, she’s running a radio station, hosting a daily two-hour program, all while raising a teenager and volunteering for a range of local organizations. But she admits she’d save money if she took the time to take care of things like regular dental check-ups. “It’s the small little things that don’t seem to be a big thing that turn into a big problem,” she observes.

Whether it is regular dental check-ups, health screenings or tests, waiting can not only cost you a fortune in medical bills later, it can even be life-threatening.

And it’s not just your body that can use preventive maintenance. Other routine items that can turn into costly repairs if neglected include:

And, of course there are check-ups and vaccinations for your pets that need to be taken care of.

4. I Bought What?

Ever had the shock of getting a credit card bill that’s higher than you expected? If you’re not carefully tracking your spending, no doubt that’s happened to you, and perhaps more than once. It’s one of the reasons we wind up with credit card debt; we have good intentions of paying our bill in full but then charge more than we planned.

In my closet there are two pieces of clothing with tags still hanging from them. Both were items I planned to return after I realized I’d never wear them, but I waited too long and the time frame for returning them expired. My next plan was to sell them on eBay, but I haven’t gotten around to that, either. There’s about $60 down the drain (and a reminder of that every time I look in my closet).

Though gift cards no longer carry the short expiration dates they used to, if you don’t use them you are still throwing away money. If someone gave you a gift card you can’t use, you may want to donate it to someone who can use it, or sell it online for cash.

5. Not Shopping When You Should

In 1969, Tom Corley’s father’s warehouse burned to the ground, and with it the family’s business. “My Dad told me much later in life that he had been thinking about getting additional insurance on his inventory prior to the warehouse burning down,” says Corley, the author of the best-seller Rich Habits. “Unfortunately, he dragged his feet too long. At the time (1970), he had about $3 million in cash (about $20 million in today’s dollars), so it was not about the money. He procrastinated and random bad luck caught him by surprise.”

Whether it’s checking that your insurance beneficiaries are current, or shopping for that life insurance/car/health insurance policy, sometimes the consequences of failing to act can be significant. When my homeowner’s insurance rate more than doubled, I looked for a new policy. Not only did I find a better rate (with a better company) but I discovered I had overpaid by about $1,200 the year before.

Shopping is also important when it comes to credit. For example, you may be paying a higher rate than you need to on your credit card, car loan or even your mortgage because you haven’t taken the time to look for a lower-rate credit card or loan. Or you may be paying more because you have procrastinated on checking — or fixing — your credit scores. This can be incredibly expensive, though. According to this lifetime cost of debt calculator, the difference between what you’ll pay with excellent credit versus poor credit is nearly $160,000!

How to Tame the Procrastination Beast 

Changing ingrained habits can be hard work, and there are all kinds of hurdles facing us, among them our brains and our biology. As Bob Sullivan and Hugh Thompson explain in in their book, Getting Unstuck: Breaking Free of the Plateau Effect, our bodies evolved to rest between periods of hard work — finding food, or running from lions — but in our now 24/7 lifestyles, our “impulse to rest is unchecked,” he writes. “…bodies at rest tend to stay at rest. Getting up always involves at least a small kick in the butt.”

And sometimes the problem goes deeper, says Coolidge:

Every time we procrastinate out of fear, every time we avoid taking conscious action to take care of our finances, we’re unconsciously sending a message to ourselves: “I’m not worth the effort.” That message, in turn, perpetuates the procrastination cycle: “I didn’t take action, so I feel unworthy and because I feel unworthy, I’m not motivated to take action.”

Sullivan and Thompson warn that changing how you get things done can be challenging: “It’s essential for anyone who plans to take on the battle of distraction to know this: the temptations never go away.”

But there are techniques you can use to improve. Among them:

Set a time limit. If a decision is relatively unimportant, make the time limit short and set a timer. Or delegate the decision and live with the results, suggest Sullivan and Thompson in their book.

Take “turtle steps,” Coolidge recommends. Breaking tasks that seem overwhelming into tiny steps, “will allow us to feel good about doing the barest minimum possible, won’t overwhelm our to-do lists, and still moves us incrementally, and surely, toward our goals,” she says.

Create daily to-do lists. Among the five strategies Corley uses to stop procrastination, one is to create daily to-do lists which include two types: (1) “Goal To-Do’s” which he defines as “specific To-Do’s that are tied to your goals. These may be goals related to your job or to a big goal, dream or purpose in life” and (2) “Non-Goal To-Do’s” which are the routine administrative tasks you need to get done. With that list in mind, you create your “Daily 5” which are “five things that you do every day that move you forward to accomplishing some big goal, dream or purpose in life.” He says “These five things could take as little as an hour to perform each day.”

Automate life. When you automate routine tasks, like setting up recurring bills on auto pay, you not only free up the time required to make those payments, you will have less to worry about. (“Did I remember to make that credit card payment? I better double check.”) Some experts go as far as suggesting you limit your wardrobe so you don’t have to agonize over unimportant decisions like what to wear in the morning, freeing your mental energy for more important tasks.

Plus, automatic payments can ensure you won’t forget to make a payment, which would ding your credit scores. (You can get your free credit scores, updated every 14 days at Credit.com.)

“I’m a big believer in setting reminders, because who thinks about finance 24/7?” says Stephanie Chan, founder of the financial education website for millennials, Outer Worth, “To avoid last-minute money stresses, I schedule reminders to notify myself of upcoming payments, filing taxes well before the rush and contributing to my retirement investment.”

Reward yourself. You saved $300 by shopping around for car insurance? Take 10 or 20% of that savings and splurge on a nice lunch out, a manicure or a round of golf. Use the rest to pay down debt or build your emergency savings fund.

How much has procrastination cost you? Share your experiences in the comments.

More Money-Saving Reads:

Image: Digital Vision

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team