When something needs doing, I can quite happily fill my time with inane tasks until the pressure of a looming deadline forces immediate action.
When it comes to my personal finances though, I am reasonably disciplined and rarely avoid tackling money management head on.
It would seem though that we are a national of financial procrastinators.
According to some new research, we spend more time organising our music collections, photo albums and wardrobes than we doing reviewing our pensions or long term savings plans.
The product provider Standard Life Savings found that, over the course of a typical year, UK adults spend on average just under seven hours sorting out their music libraries.
In stark contrast, they spend just four and a half hours reviewing their pensions.
Over half of people don’t review their pensions at all.
Those that do review their private pension arrangements do this only once every nine months.
They also found that of those people who have lost their pension details, 20% seem unconcerned and are happy to live in blissful ignorance.
This lack of long-term financial planning was accompanied by procrastination over day-to-day budgeting.
Only 57% know the exact balance of their current account and 40% put off their budgeting in preference of doing other things.
Only a quarter of people regularly set aside the time to review their personal finances and many are attempting to simultaneously stay on top of their money management while multi-tasking or watching TV.
Five ways to avoid being a financial procrastinator
Standard Life Savings have come up with five tips to help establish a savings mindset:
- Track your spending – Track your spending habits and get to know exactly where every single penny is going. You may find an online dashboard to make this easier. It’s only by reviewing where your money is being spent that you can make decisions about whether you wish to continue spending at the same rate on the same things.
- Set yourself a proper budget – Having tracked your spending, you need to set yourself a realistic budget so you have precise control over what you have to pay and how much you can save and spend. Once you have paid your necessities and put money towards your savings goals, the remaining money is yours to do with as you please.
- Beware of impulse spending – Start using the “Need or Want” strategy. Before you spend anything, ask yourself, “Do I really NEED this, or do I just WANT it?” You may find that many of the things you purchase were bought on impulse so if you’re not sure, make yourself walk away and come back in a few hours. You can also use the “how many hours would I have to work to afford this?” test – that can quickly help you decide if you really do need it or not.
- Get organised with bill payments – Managing bills can be a financial challenge. Rather than missing a deadline and being hit with charges, set up monthly direct debits for utilities. It can also be useful to pay as many other bills as possible on a monthly basis – but check first that this won’t incur higher interest payments. With fewer bills to actively manage each month, it all becomes easier. But make sure you regularly check payments are being made ok and that totals balance out at the end of the year too.
- Plan for the long term – People often don’t plan how they will save for their future, perhaps because something like retirement can seem so far away and the planning a bit overwhelming. The reality is that while it may take time to find out what you need to know and to get organised, it’s not as hard as you might think. You can do lots of your planning online these days, so make sure you sign up with your pension provider for an online account – they may even have an app to help you keep up to date. There are calculators and guides available online to make the process easier too. And if you feel you need more support, and then don’t forget you have the option of seeking guidance or advice when you need it.
Do you suffer from financial procrastination? How do you avoid being a financial procrastinator and stay on top of your money management?