The way to overcome procrastination when it comes to money is to set a savings plan.
Saving better is all in the head. If you catch yourself thinking any of these things, then you’ve got really dangerous savings attitudes:
Saving a little won’t add up to much, so I won’t. A little adds up very quickly indeed. Even $10 a week, which most of us can save (or can add to our regular savings). That $10 a week grows to more than $31,000 after 25 years – taking into account 3% inflation and a tax rate of 30%.
But I’ve got an excuse. Excusitis is alive and well in New Zealand. Groan. I hear it all the time. Take the single dad who emailed me and said he couldn’t save because he was a single parent. That, I’m sorry, is no excuse. There are plenty of one income families (sometimes supporting two adults) that do save. My tramping buddy is one and she was still a student when she first became a single parent. Yet she’s one of the best savers (percentage of income-wise) I know. Tramping gives you plenty of time to discuss such things in depth. Financial educator Lisa Dudson’s book Get Your Head Out Of The $and has a great list of common excuses trotted out by her clients including: “I don’t understand these things”. “I don’t have enough time”, “I’m overwhelmed by too much information”, and “I’m afraid of making a mistake and failing”.
I procrastinate. Procrastination is an evil human vice. Delaying action has negative effects on people’s lives, including helping to keep them poor. Procrastinators are usually disorganised. The way to overcome procrastination when it comes to money is to set a savings plan, write it down, list what you need to do and tackle the list one item at a time. Or, if you’re a serious procrastinator, seek psychological help.
I’ll do it as soon as. “I’ve bought a new car”, “I’ve had a holiday”, “I’ve got a new job”, or “I get a pay rise”. The only answer to that is to start today. There will always be another reason to delay. This delaying tactic is often used to avoid writing a budget (which could help you save better), turning savings into investments, or simply taking stock of where you are financially.
I don’t trust the government. The favourite one trotted out by conspiracy theorists everywhere. If I had a dollar for every reader that told me they weren’t buying into KiwiSaver because they didn’t trust the government, I wouldn’t have to pay for my own trips to the café. A classic was the NZ Herald reader who commented a few weeks ago: “The best place for KiwiSaver information is in the bin. Money down the toilet.” I did a quick calculation on the money I’ve put into my own personal KiwiSaver. Over three years my investment has returned 284% (that includes the government payments), or 94.66% per annum. Gosh, I wish my toilet regurgitated that sort of return on investment more often.
The government will look after me. I once asked a friend who was living on the DPB what she was going to do for money when she retired. The answer was: “there will always national (NZ) super”. I hope she’s right. Anyone who is betting their future on that could be sadly mistaken, however. Some would argue that the country can’t afford it.