Is procrastination a disease formed from lack of motivation? Do we lack self-control? In Latin, procrastination means “to put off until tomorrow.” Why is it difficult to save part of our hard-earned dollars, but not difficult to delay some purchase until we can afford them? In 2006, for the first time Americans savings rate was negative one percent. Simultaneously, we were spending more than we earned. Thanks to easy credit. Europeans, Chinese, and Japanese, had a savings rate of at least 20 percent. What’s up with us? Our big cars, big vacations, and big homes didn’t help us with our financial health. You can’t deny that we are a consumerism society.
According to the U.S. Department of Commerce’s Bureau of Economic Analysis, Personal Consumption Expenditures (PCE) has increased monthly since February 2010. Since emerging from the “Great Recession” we are gradually allowing our spending habits to return. The same spending habits which got us in trouble in the first place. It has been foreshadowed that consumers will be adding $20 billion in new credit card debt this year, according to a Card Hub study.
How much is lost when we give into your impulsive emotions from our long-term financial goals? We promise ourselves we will save our money, exercise, and change our diet when we are in an unemotional state. But when the emotions pour out what we just promised is put off for another day. When we see a new pair of shoes, or cell phone that we must have our promise to save is put off until tomorrow. When we plan to exercise but rather sit in front of the TV to watch a new episode of our favorite show. We want to diet but the delectable dessert seems so much more appealing. We give up our long-term goals for immediate gratification.
Most of our decisions occur during an unemotional state…basically, when you are clear-headed. Even I succumb to my own vices. My goal is to lose 10 lbs. I promise myself I will cook my own food to cut back on eating out. After work and the gym, my day is winding down around 8:00pm. My emotions kick in and I no longer feel like cooking anything. I’m tired and realize that cooking means cleaning dishes afterwards. Instead, I opt for a quick fix at a great burger place 5 minutes from where I live. A solution for me is to pre-commit by pre-cooking my meals and storing them in the fridge where they will be readily available.
By pre-committing you have set up a stepping stool to get you in the right direction. The key to pre-committing is to do it around your terms. You know yourself best. You have the opportunity to set up your own plan of action rather than someone else telling you what you have to do. Of course, there will be times when you might veer off your own path, but the point is to get you in the right direction to avoid procrastination. For example, I don’t always like to work out alone. To commit in advance to my workout schedule, I will make it a point to exercise with a friend.
Saving is another issue we have as a consumerism society. However, since the financial crisis we were clearly given the message: you are on your own. You are on your own when it comes to creating your own financial security. You are on your own to building your retirement account and protect your family’s finances. If saving poses a challenge, you can take advantage of automatic deductions for your retirement account and emergency fund. I always use automatic deductions for building my retirement account, savings account, and other investments. It’s easy, simple, and I’ve learned to live on less income.
Everyone procrastinates and it’s not a secret. Implementing mechanisms to put us on the right direction is a viable option. Here are a few solutions to avoid procrastination:
- Pre-commit: setting up a plan
- Automatic deductions
- Get a dose of your reality by managing your finances. Understanding how you spend your money will provide insight to better identify your financial goals. For instance, you may realize (to your amazement) you spend $300 a month on dining out. You goal is to set up an emergency fund. By reducing your dining experience to three times a week, you could save $100 to put towards your emergency fund.
This guest post is by Ornella Grosz, a personal finance expert, speaker, and the author of Moneylicious: A Financial Clue for Generation Y. She blogs regularly at http://www.moneyliciousblog.com. She has been featured as a financial expert on top hit radio stations across the country, CBS, NBC, ABC, FOX, TheStreet.com, AOL’s WalletPop and Daily Finance,CreditCards.com, and more.