Financial Procrastination

• Thirty years old, retirement is at least twenty-five years off.
• Fifty, well, you’ve decided you want to work as long as you can, so there’s still time before you start planning for the future.
• Forty and haven’t planned, you tell yourself that you are probably going to work until sixty-five anyway, so tomorrow is still twenty-five years out.

As long as financial planning is part of your tomorrow, you will never reach your financial potential, because there simply isn’t enough motivation to act today. Discussions about products, an analysis of stock market trends, even sophisticated projections for the future don’t motivate most Americans (or anyone else), to effective financial action—to start soon enough and plan long enough. Consider the difference in urgency between an issue that you perceive as requiring immediate attention and one that can wait until later. The tine to stop bleeding is now.

Suppose on your way to work this morning you suffer a seemingly minor cut. It starts bleeding, not too much, but steadily. You apply a Band-Aid, but notice an hour later that it’s soaked. The wound doesn’t really hurt, and you aren’t panicking, but you are concerned that the bleeding hasn’t stopped. When things don’t get better that afternoon, you decide you shouldn’t wait any longer. You seek medical attention before you go home.

As you pondered how to respond to the cut, did you think “I wonder if this wound could shorten my life expectancy or affect my quality of life after age sixty?” Of course not! This wasn’t a decision about the future—it was about right now! Even though there might be long-term health consequences related to the cut, you didn’t need to reflect on possible future-related issues to conclude you needed further medical attention. It was obvious that something was wrong with your present plan. The recognition of the immediate problem prompted immediate action.

Suppose for some reason, you decided to put off examination and treatment, and just put a new bandage on it every morning. You might not die. But is there any doubt that ignoring the cut could jeopardize your long-term health? Understanding the health risks, most normal, rational people will act now. Another reason no to act now: What you don’t do today has a big impact on what you can do tomorrow.