It is easy to put off doing even the most vital steps, like financial planning. Things that we fear the most sometimes lead us to procrastinate. Putting off important decisions can really catch up to you, especially in the realm of personal finance.
If you are guilty of procrastination, you certainly aren’t alone. I am very good at stalling on important life steps, and I am not proud of it. The things that I don’t like to do end up on backburner for quite some time.
My biggest fear is going to the doctor. I frequently postpone my appointments because of my fear. We know what happens when you neglect to visit the doctor, especially as we age. Routine exams and scheduled procedures are necessary. Small medical problems, when left untreated, grow into bigger problems. The same goes for money problems.
Just as I have a fear of what the doctor might uncover, many people are afraid of what a financial advisor might find. Sharing your financial health with someone is unsettling. You know that you might face some harsh realities in the advisor’s office. But putting off the discussion with a trusted planner does not make your financial health better. Nobody’s finances improve through inattention.
Saving for retirement, education or any other goal is much more manageable as a prolonged jog rather than a frantic sprint right before you need the money. For example, putting off making investments and savings makes it so much harder to do.
Waiting to invest makes you miss out on the wealth-building magic of compounding interest. If you saved $100 dollars per month for five years, you are $7,343 richer than if you waited five years to start saving. This example assumes a realistic 7% yearly return from stocks, mutual funds or another investment. After five years, compounding interest nets you $1,243, which continues to compound and grow.
Other financial decisions, such as life insurance, become more expensive as you age. Naturally, debt snowballs and becomes harder to manage if you procrastinate about paying it down. This is why it’s best to start financial planning as early as possible.
Planning for your future retirement, saving for your child’s education and insuring that your family is provided for in case of emergencies sounds overwhelming, but it isn’t. The most difficult part is taking the first step and setting up the appointment. The rest is easy and straightforward. After many years, it’s clear that planning is the best thing that you could do for yourself and your family.
Just as I feel better after my annual checkup with my physician, taking control of your finances ultimately gives you more peace of mind and security.
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Maureen Crimmins is the co-founder of Crimmins Wealth Management LLC in Woodcliff Lake, N.J. Her websites are www.CrimminsWM.com and www.RootsofWealth.com.
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