You know the obvious ways that procrastination can impact your life: the annoyed looks you get from friends when you’re late for dinner—again. The “we need to talk” meeting that your boss schedules because you’ve missed yet another deadline.
But what you might not realize is that you pay a bigger price for constantly putting tasks off—both in opportunity costs and in actual costs that impact your wallet.
Unfortunately, procrastinating is a hard habit to break, says Shari McGuire, a time-management expert and author of "Take Back Your Time: 101 Simple Tips to Shrink Your Work-Week and Conquer the Chaos in Your Life."
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“Some people enjoy the euphoric rush of a last-minute push to accomplish a task,” she explains. “Others get caught up in what’s called analysis paralysis, in which they overthink something and never get around to taking action.”
A third trigger? Self-sabotage. Basically, you’re fearful that you don’t have the expertise to complete a goal, and you put it off so that you’re not found incapable. In this case, “[you figure] not getting it done is better than trying and failing,” McGuire adds.
Regardless of the reason why you drag your heels, it’s time to get smart about the financial repercussions of poor time management. That's why we’ve rounded up the top money consequences of procrastination to show—in real dollars—how it can wreak havoc on your wallet.
1. You pay your credit cards late.
This procrastination tendency is one of the worst things you can do to your finances for several reasons. The obvious one is that you’re slapped with a fee: $25 for the first violation, and $35 if you’re late a second time within the next six months.
But that’s not the only financial hit that results from being late to pay on your credit card. If you miss two consecutive payments, your credit card company can jack up your interest rate, which means you’ll be charged even more for any balance you carry from one billing cycle to the next.
If you have a card with an introductory offer for a 0% APR, the penalty can be even worse, says Bob Gavlak, a CFP® with Strategic Wealth Partners in Independence, Ohio. “If you’re late just once, all of a sudden your rate can rise upwards of 20%,” he explains. In fact, the median penalty APR, often applied to consumers who pay late, is a whopping 29.99%.
What’s more, you may keep feeling the effects of late payments years down the road through the impact on your credit score. More than one third of your score is determined by your payment history, which takes into consideration “delinquencies,” such as delayed payments.
Generally, if you’re more than 30 days behind, credit bureaus will be notified and you’ll have a mark against your report for the next seven years—and the bank can report a late payment even sooner if you’re a repeat offender. Ultimately, a lower score can translate into higher interest rates on a loan or mortgage down the line.
One line of defense against credit card kickback? Automate your payments to guarantee that you pay bills on time. McGuire also suggests adding a calendar alert on your phone to remind you of upcoming bills due. And if you do miss a payment, call your credit card company as soon as you realize the mistake, to ask if they’ll rescind the fee.
2. You buy gifts at the last minute.
It’s your mom’s birthday tomorrow, and you’ve somehow managed to put off getting her a present all month. So you pop into a store and grab the first cute (but expensive) cashmere sweater you see. You know that if you’d taken the time to hunt around online, you could have scored a better deal—but when you’re rushing to find something in the nick of time, comparison shopping falls by the wayside.
A flight from Washington, D.C., to Paris starts at $1,243 if you purchase it three months in advance—and spikes to $1,987 if you leave in two weeks.
“People feel less price-conscious when they feel pressured to buy something quickly,” says consumer expert Andrea Woroch. “[Plus, keep in mind] that if you’re purchasing a registry item, most of the midrange priced gifts will already have been fulfilled, so procrastination means you may be left fewer choices.”
As soon as you’ve been invited to a party or realize you have a friend’s birthday coming up, identify a specific time to purchase the gift and write it in your calendar, suggests McGuire.
3. You don't plan ahead when booking travel.
Admit it: You’ve been anticipating going on that Caribbean getaway for months—and now the trip is only three weeks away. You have to book fast, and you're feeling the sticker shock.
As for that assumption that you'll snag last-minute deals, don't count on it, says Woroch: “Any time you are planning a trip, procrastination means you may pay more and get fewer options for flight schedules, preferred hotels and car rentals."
McGuire recommends booking an airline ticket three months out, and your hotel and car two months out. Case in point: According to Kayak, an economy flight from Washington, D.C., to Paris starts at about $900 if you purchase it three months in advance. It goes up to roughly $1,400 a month in advance, and spikes past $1,500 if you want to leave in two weeks. Bottom line? Pre-planning could pay for a few hotel nights.
4. You delay opening a retirement account.
Maybe you hate filling out paperwork, you’re overwhelmed by your options or you’re holding off until you’re in a better position financially—whatever the excuse, every day that you fail to open a retirement account ends up costing you.
“Not only do you get a tax deduction, but in the case of a 401(k), you may get a match from your employer,” Gavlak says. “[Your retirement account] is extremely valuable.”
Say your employer matches 100% of your 401(k) contributions up to 3% of your salary. If you make $50,000, 3% is $1,500. If you don't take advantage of the match, “you’re leaving $1,500 on the table,” Gavlak says. “That's basically free money.”
Over the long term that number becomes even more substantial, due to compound growth. A 3% contribution matched by your employer means you net $3,000 per year toward retirement. If you started saving today, rather than two years from now, in an account that earned 6% per year, you’d have more than $63,000 extra in your account in 40 years!
Experts estimate that staying with an employer for more than two years cuts your lifetime earnings by at least half.
5. You cab it instead of taking the subway.
If you live in a big city, constantly running late can lead you to needlessly splurge on pricey cab fares instead of much cheaper public transportation. “Even taking a taxi just once a week can add up,” Woroch says.
The numbers speak for themselves: A five-mile taxi ride in New York City will run you approximately $20—that’s almost eight trips on the subway at $2.75 each. In Boston, you’re looking at $16.20, which is almost eight $2.10 trips on the T. For residents of Chicago, it costs $18.60, or the equivalent of more than eight $2.25 trips on the L.
To avoid that last-minute hail, McGuire suggests taking advantage of a calendar app with a “travel time” feature, which shows you how long it will take to get to your next appointment. “Include a reminder alarm that will go off 10 minutes before you need to leave so that you can wrap up what you’re working on,” she adds.
6. You sit on a job application.
Who doesn't want to nail the perfect cover letter and fine-tune that résumé? Still, the longer you wait to jump on a job posting, the lower your chances are of scoring an interview. “People are working hard to find jobs in the current economy, and new jobs tend to fill up quickly," Gavlak says. "It’s imperative to be on top of your job hunt.”
The monetary cost of missing the job application boat if you’re unemployed is obvious. But it takes a toll even if you’re already working—you’ll lose serious earning power by staying in a job too long.
For one thing, many companies still have salary freezes in effect as a result of the recession, which means current employees won’t receive raises. And even if your employer does grant salary upticks, they are generally a set, modest percentage of your current pay.
In order to really hike up your paycheck, you usually have to reset your baseline salary by changing jobs. Some experts estimate that staying with the same employer for more than two years cuts your lifetime earnings by at least half.
So log off Instagram and put your job-hunting game-face on. If you’re unemployed, wake up at the same time you did when you had a job and spend the same hours you would have been working to focus on your job search. “This will keep the days from slipping away and get you back to employment,” McGuire says.
Already have a gig? Set aside 30 to 60 minutes every day to search and apply for your next opportunity. “Respect that time slot as if it were a meeting with the most influential person in your life,” McGuire says.
7. You keep putting off home improvements.
Is your idea of a fun weekend changing your air conditioner’s filter, insulating your doors and windows, or swapping out incandescent bulbs? We agree it’s probably not anyone’s idea of a rollicking good time—but any upgrade that increases energy efficiency ultimately lowers costs for you.
According to the Department of Energy, adding insulation will pay for itself within a few years, thanks to cheaper heating bills. Meanwhile, swapping out 15 incandescents with more energy-efficient bulbs, like LEDs or CFLs, could save you $50 a year. And cleaning your AC filter can reduce energy consumption by 5% to 15%.
Need to find more ways to keep your energy savings from slipping through the cracks? Consider working with a home-energy auditor to see if you can uncover even more savings.
8. You need to rush-ship items bought online.
Not only does procrastination leave you no time to comparison shop but it also means pricey expedited shipping surcharges. For example, overnight shipping at J.Crew is $25 compared to $5 for standard shipping. Williams-Sonoma will slap you with an extra $17.50 for expedited delivery.
“Thanks to smartphones and mobile-friendly websites, it’s so easy to make a purchase on the internet wherever you are,” McGuire points out. Translation: You have no excuse to put your online shopping on the back burner.
Take just one initial step toward a goal—be it creating a login for your company’s 401(k) website or bookmarking a couple of hotels for Thanksgiving—so that you’re more likely to follow through.
Even when you find yourself with five extra minutes, you should be able to whip out your phone and place an order quickly. For items that you tend to buy repeatedly, many online retailers will let you schedule orders so that you're getting the items you need before you run out.
And if you use calendar alerts to time your purchases, make sure you give yourself enough leeway to qualify for most retailers’ standard shipping rates, which is generally about a week.
The Key to Beating Procrastination
All these time-delaying tendencies ultimately add up, and there are plenty of techniques you can try to break your proclivity toward procrastination. But the biggest key to finishing what you started seems to be, well, starting in the first place.
The Zeigarnik effect is a productivity-boosting method that was conceived in the 1920s by Soviet psychologist Bluma Zeigarnik, who observed through a series of studies that people remembered incomplete or interrupted tasks better than completed ones.
In other words, a partially finished project will weigh more heavily on your mind and compel you to finish it. So take just one initial step toward a goal—be it creating a login for your company’s 401(k) website or bookmarking a couple of hotel options for your Thanksgiving break—so that you’re more likely to follow through.