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The High Price of Procrastination

Physicians, we pride ourselves on being efficient, strategic, and proactive when it comes to treating our patients and managing their health. But how well do we apply these qualities in our own lives, particularly in managing our finances?

This is the question Financial Success MD is raising today, not to point fingers, but to help us all reconsider the way we approach financial decision-making in hopes that we might secure not only the health of our patients but also our financial future.

Procrastination, that pesky habit of postponing important decisions and actions, is an issue many of us grapple with. And when it comes to finance, procrastination could be costing us a lot more than we realize. Through personal experiences and practical examples, this article illuminates the often overlooked yet substantial cost of procrastination in our financial lives. From delaying investments to postponing repairs or even delaying a planned act of generosity, the impact of delay on your wallet can be staggering.

Why read this article? Because time, like health, is a finite resource. We all have a finite amount of time to make our money work for us, and the earlier we start, the better off we will be. If we can diagnose and treat an illness in its early stages, why can’t we do the same for our financial health?

An important aspect of productivity is the concept “Do It Now.” When one concludes that a particular thing should be done, the most cost-effective way to get it done is to do it now. But we often do not follow this ideal. Instead, we procrastinate until not doing it becomes more painful than doing it.

Sometimes it is the fear of making a wrong decision, or a less-than-perfect decision, that stops us in our tracks. But what we don’t see at the moment is how much money or time it will cost by not acting now. Everything has a price and procrastination can often be very expensive as I am learning firsthand almost daily. Yes, procrastination is an issue I struggle to avoid just like you.

You and I both have said something like this, “I’ve been wanting to do that for a couple of years now.” Why has a couple of years gone by without any action? What have you lost by procrastinating? Will you still be saying the same thing in another couple of years?

Following are some examples of what it actually costs to put off decisions or actions you already know you should do. Let these examples move you into action.

 

Investing

When I was a second-year surgical resident, I discovered I was eligible to participate in the hospital’s deferred compensation retirement plan. I decided I would open an account and make contributions. I was only able to talk to one other resident in the entire residence program to participate with me. Everyone else said they were going to wait until they were attendings to start saving for retirement. What did that delay of less than four years cost them?

During my 2nd year of residency, I started making contributions of $260 from each paycheck (twice a month). During my 3rd year, I increased my contribution to $288 per paycheck. As a 4th year resident and expecting our first child I invested $183 per paycheck. Then in the final year, after my first son was born, I contributed $136 per paycheck. I deposited a total of about $19,000 into that retirement account during residency and we haven’t touched it since.

Today, 30 years after graduating from residency, that account has a value of just over $380,000. That calculates to an effective 10% rate of return when compounded monthly. This is not a theoretical return, it is the actual return from my deferred compensation retirement account over 30 years invested in mutual funds. If I took the money now using the 4% rule, I could take out $15,200/yr for the rest of my life.

For those who were eligible to participate in this retirement plan and didn’t, their 3½ year delay in starting to invest about $5,400 a year cost them $380,000 and this number is continuing to grow. Those who procrastinated lost $15,200/yr for the rest of their retired lives. If I live another 30 years and don’t withdraw anything from the account, and it keeps growing at the same rate, I will have excess of $7 million to give away upon my death.

Don’t get caught up on whether you could have started saving in residency, that is not the issue. The point is what happens if you procrastinate 3½ years before you begin investing.

 

Making Repairs

How often do we see something that needs to be fixed and decide to do it later? Many things that are damaged grow worse with time. The repair and the cost to repair it begin to grow the longer we wait to make the repair.

My son was considering buying a house a few years ago. He asked me to take a look at it with him to see what I thought. As we toured the house we discovered a problem with the floor, it was moving when we walked on it. We started taking a close look to find out the cause of the problem.

There was a nearby water heater leaking from the pressure relief valve. The valve needed to be replaced. This is a $20 part that can be replaced in just a few minutes. If you don’t have the time or the knowledge to replace the part, a plumber can do it for $100. If fixed promptly, it is not expensive and there is a little bit of water to mop up.

The owner didn’t fix it promptly and I suspect it has been leaking for over a year. Now the vinyl flooring, carpet, carpet pad, plywood floor, wallboard, and joists under the water heater in the two surrounding rooms all need replacing. I suspect this will cost in excess of $20,000.

Never let water get into areas it is not supposed to go. Fix it immediately or there is a very stiff price to pay. Needless to say, my son passed on this house.

 

Giving

I frequently encounter people who tell me of a particular account or sum of money they intend to give an organization or individual upon their death. Most of the time they have no intention of using this money in their lifetime and it will definitely be passed on. I often suggest they consider giving that gift now, instead of waiting until they die. They often tell me they want the investment to compound so they can give the recipient a larger amount. If given now it could compound in someone else’s portfolio and the increase would not be subject to estate taxes.

One instance I encountered consisted of an account that was funded in such a way that the owner did not want to ever use the money. She had stated in her will that this account was to go to her church. I asked if her church could use any money right now. She replied that they always need money for something.

Why should the church have to wait another 20 years to get the money you plan to give them? Imagine if you gave it to them now and they used it to build a nice playground for the kids to use. You would be able to know what your money was used for and see the benefits it has provided.

This giver will lose the good feeling of giving and seeing their gift used.

If you are planning to give excess money to your children, give it to them now or when they are old enough to use it responsibly. Your 35-year-old can benefit from the money a whole lot more today than they will if they inherit it when they are 65 and retired. The collectibles you have sitting in a box in the storeroom that will never again be on display in your home should be given to someone who will actually display them.

I remember when a natural disaster happened and I decided to give to the relief effort. Instead of writing a check right away, I added it to my to-do list. I eventually gave the gift, six months later! I’m sure there was a much greater need immediately while the acute disaster was being handled than there was after they moved into the rebuilding stage. I had no reason to wait, yet I procrastinated, and someone paid a price for my delay.

 

Filing

 

Have you ever set something on your desk that you need to file but you decide to do it later? I have. In fact, I just spent a couple of hours clearing them off my desk, the job I should have done little by little as each item arrived.

As long as there are papers waiting to be filed sitting on my desk, I must work around them, or move them around to get to other items I need on my desk. When enough papers pile up, I can’t find anything on my desk. At this point, every task I do involving my desk takes longer than it should. Time is more valuable than money.

A messy desk is the result of procrastination. Everything on that desk needs to be dealt with and I am putting off the action or the decision and it is affecting my life and my free time. Consider the touch-it-once method; when you get something that needs your attention, complete the work and be done with it. Otherwise, you will move it aside or look under it 100 times before actually taking care of it. This method also works great with email.

What To Do Now

There are so many things we procrastinate on which cost us and our family time and money. Instead of mowing the field while it is easy, we wait until the grass is so tall the job becomes very difficult, then we delay even longer. If we delay planting the garden, we will miss the harvest because the frost came and killed everything before it ripened. Since we didn’t replace the fence three years ago when we thought about it, now the new fence will cost twice as much as it would have cost.

If you are procrastinating because you hate doing it, you won’t hate it any less tomorrow so get it done now and you won’t have to dread it anymore.

If you are procrastinating because you can’t decide what to do, you likely won’t be able to decide tomorrow either, get it done and off your plate, then you won’t have to make that decision weighing you down any longer.

If you are procrastinating because you think it will be hard, it will be just as hard tomorrow and in reality, it is usually easier than you imagined.

If you are procrastinating because you don’t have time, you won’t have time tomorrow either, so get it done now.

If you are procrastinating because you need help, then contact someone to help you and schedule a time to get the project done.

If you are procrastinating because you don’t know how to do it, ask Google and you will find it is easier than you thought.

If procrastination is a major problem in your life, and you could use some assistance to conquer it, high performance coaching will help you get better organized so you can save both time and money.

 



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5 thoughts on “The High Price of Procrastination”

  1. After reading the post on the high price of procrastination on Physician on FIRE, I am reflecting on the thought-provoking insights shared. Procrastination is something many of us struggle with, and this article effectively delves into the tangible costs it can have on various aspects of our lives. The examples and scenarios presented hit close to home, making it clear that delaying important decisions or actions can indeed lead to missed opportunities and regret. The article strikes a chord by emphasizing the value of time and the importance of making timely choices, particularly when it comes to personal finance and life goals. Kudos to Physician on FIRE for addressing this universal issue in a relatable and impactful manner. This article serves as a wake-up call to reassess our habits and prioritize actions that align with our long-term aspirations.

    Reply
  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. After reading the post on the high price of procrastination on Physician on FIRE, I am reflecting on the thought-provoking insights shared. Procrastination is something many of us struggle with, and this article effectively delves into the tangible costs it can have on various aspects of our lives. The examples and scenarios presented hit close to home, making it clear that delaying important decisions or actions can indeed lead to missed opportunities and regret. The article strikes a chord by emphasizing the value of time and the importance of making timely choices, particularly when it comes to personal finance and life goals. Kudos to Physician on FIRE for addressing this universal issue in a relatable and impactful manner. This article serves as a wake-up call to reassess our habits and prioritize actions that align with our long-term aspirations.

    Reply
  4. After reading the post on the high price of procrastination on Physician on FIRE, I am reflecting on the thought-provoking insights shared. Procrastination is something many of us struggle with, and this article effectively delves into the tangible costs it can have on various aspects of our lives. The examples and scenarios presented hit close to home, making it clear that delaying important decisions or actions can indeed lead to missed opportunities and regret. The article strikes a chord by emphasizing the value of time and the importance of making timely choices, particularly when it comes to personal finance and life goals. Kudos to Physician on FIRE for addressing this universal issue in a relatable and impactful manner. This article serves as a wake-up call to reassess our habits and prioritize actions that align with our long-term aspirations.

    Reply
  5. This really spoke to me. I am a terrible procrastinator. Hopefully, I will keep this post top of mind and just do something. I read recently that doing something is better than doing nothing.

    Reply

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