Procrastination is key to credit card debt, financial disaster

If you live like there's no tomorrow, you'll arrive there anyway -- broke

By Gina Roberts-Grey

If "don't do today what you can put off until tomorrow" sounds like your personal money mantra, it's time to readjust your thinking before it's too late.

"Living like there's no credit tomorrow and burying your head in the sand almost always hurts your credit score today -- and for many 'tomorrows' too," says certified financial planner and "The Emotion Behind Money" author Julie Murphy Casserly.

Luckily, you can live in the financial present and break the habit of procrastinating when it comes to your finances.

Why do you stall?
If you stall on financial matters, you're not alone. Manhattan psychologist Joseph Cilona says more than 20 percent of the adult clients he sees in his practice identify themselves as chronic procrastinators.

Even though there's a little procrastinator in all of us, there's a difference between putting off doing the laundry or washing the car and not paying your bills on time.

"Finance-related procrastination usually stems from fear of failure or lagging self-confidence and abilities. It may also be related to a fear of financial responsibilities, which is why some people may be prone to procrastination when it comes to money and not in other areas of their life," Cilona says.

Then there's the lack of the "fun factor." "People put off experiences that they don't like or that make them uncomfortable," says Matt Wallaert, a behavioral psychologist in New York. "If balancing your checkbook is boring, tedious or gives you a headache, you're probably going to do something -- anything -- instead of sitting down with your register," Wallaert says.

These "bad habit" breakers will send procrastination packing:

• Think small. To avoid being intimidated by paying off credit card debt, wading through a huge stack of bills or reviewing a 20-page credit report, break down large financial tasks into small parts. For example, if upping your credit score is on your financial bucket list, tackle one negative entry or delinquent payment at a time. "It's better to take small, consistent bites than to procrastinate and do nothing at all," says Susan Howe, member of the American Institute of Certified Public Accountants' National CPA Financial Literacy Commission

• Retrain your thinking. Instead of working on a financial plan to save for a "rainy day," Howe says to put a positive spin on financial plans. "Approach budgeting and 'emergency accounts' as though they're cushions, not lifelines," she says. Don't think you're "paying off a credit card," instead know you're getting one step closer to having more disposable income every month.

• Make a public commitment. For motivation, commit to your finances with a tweet that you're going to balance your checkbook, or write a Facebook status update or blog entry that says you're going to establish a budget. Not into social networking? Wallaert says tell your significant other or best friend -- whatever you need to do to find a way to commit to dealing with a financial issue. "You'd be surprised how much simply saying, 'I'm going to call my credit card company today,' makes you more likely to do it," says Wallaert

• Think task not time. Take a task-oriented approach, not a time-oriented approach. Instead of thinking "paying bills will take 30 minutes," make a plan to pay five bills -- no matter how long it takes -- today. "That way, you won't feel weighed down by the task and want to run screaming away from it," says Howe.

• Set a specific reward for a job well done. Give yourself a pat on the back when you've tackled a financial task head on instead of letting it slip by the wayside. "There shouldn't be any wiggle room on this," says Cilona, the Manhattan psychologist. Whether it's indulging in a piece of cake you've been saving until you schedule your bill payments or buying a few new songs on iTunes after you balance your checkbook, make sure there's a reward awaiting for you to celebrate a financial success.

And be patient. Casserly says it generally takes two to three times of screwing up again before a new financial habit develops. "So don't be surprised if you lapse back into a state of procrastinative thinking once or twice on the road to living like there's no credit tomorrow."

See related: Your first budget in 3 easy steps, A generic budget: Guidelines for spending categories, 4 simple ways to cope with debt-related stress, Even barely late payments can impact your credit score

Published: November 30, 2010

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