Procrastination kills. Also, procrastination costs. Here are ten ways that procrastination can cost you …
Being disorganized can cost you money.
Being fat can also cost you money.
Now for more bad news:
Procrastination can cost you money!
Here are ten different, exciting ways that waiting until the last minute can suck money out of your wallet:
1. Waiting to do your federal taxes
I used to be horrible about this. If you have all of the information you need to complete your taxes, there's no really good reason to procrastinate (as much as it's a pain in the butt to get the return together).
If you owe money to Uncle Sam, that payment is still due at the normal time. An extension to file is not an extension to pay, and if you don't pay what you expect to owe by mid-April, there will be penalties and interest to contend with.
If you are expecting a refund, then you can't get the refund until you file.
So, get those taxes in, and move on with life.
2. Filing for reimbursements
Certain kinds of accounts, like flexible spending accounts for heal expenses, have deadlines for filing claims.
Flexible spending accounts are “use-or-lose” accounts (meaning that past a certain time any unused portion of what was put in goes bye-bye).
Miss the deadline to get eligible expenses approved? Oh well.
Waiting until the last minute on these things is risky, mainly because much of the reimbursement process is done online, and any one of the systems that you'd need to get into may be down.
3. Paying bills
In my hometown, we could walk pretty much anywhere we needed to go. (Not so now; I take my life into my own hands walking the 0.3 miles to the nearest convenience store because of the lack of sidewalks.)
I remember my grandfather walking down to pay the gas bill in person, on the day it was due, so that he had the money in his checking account as long as possible. That, and it was exercise.
There's less incentive to pay bills near the due date, because now a high interest rate on a savings account is 1%.
But the penalties for paying late are higher than ever. Best not to cut it too close. Some services will let you pay the day of, for a fee. Paying early is free, though.
4. Loss of compounding
This is less of a monthly or a yearly procrastination thing, but a decade-long procrastination thing.
Loss of time to compound your money can cost you six, or even seven, figures.
Fred Smartworth starts investing at 20 years old, putting $2,000 per year for eight years in an investment that ends up earning 8%. From age 28 on, he doesn't put any more new money in.
Hollister Dumass, one of Fred's classmates, waits until he's 28 to start investing. He puts the same $2,000 in each year starting at age 28, and doesn't stop.
When they both reach 50, Fred's ahead of Hollister because of the early compounding.
Don't procrastinate on this one.
5. Missing out on savings
The fear of loss is a powerful, albeit a bit overused, marketing tool.
Having said that, though, deadlines are deadlines, and really good deals don't last forever.
The only reason the fear of loss works is because (a) either you can't get in / buy / participate after the deadline, or (b) it costs more after the deadline. The loss is real at that point if you actually did want the thing.
6. Missing open-season elections
“Open season” is a limited time window during which employees can make elections for flexible spending accounts, life insurance, or supplemental insurance.
A few years ago the deadline to make an election fell on a Sunday. I started the submission, and went away from keyboard for a bit for some reason, and fell asleep late in the evening.
I woke up — actually, jumped out of bed — around midnight. I tore back down to the computer to finish the process, which I still could do because the web page was still open. I finished my election probably after the door should have closed, but by some act of grace it was successful.
Easily things could have timed out, the computer could have decided to reboot, any number of reasons, which would have cost me a few hundred dollars in tax savings. After that, I always gave myself a few days before the deadline to get things ready.
7. Giving notice to vacate an apartment
I rented an apartment the first year after school at my job. I found a house fairly quickly (mainly because I found a fiancee even more quickly!) and gave notice to my landlord of my intent to vacate.
The lease was pretty specific about how far ahead I needed to give notice in order to avoid another month's rent.
I gave notice at the proper time, but my landlord still told me what would have happened had I missed the deadline. (Basically a month's rent.) I guess he really took great pleasure in catching people with that gotcha.
Lease agreements have fun stuff like this in them. Read and heed.
8. Missing a service switchover
Our credit union's website and the software behind it have gone through a number of changes over the years.
At one point, it was announced months in advance that the bank's core software suite would be replaced. A side effect of this was that all user access to transaction data prior to the switchover would be lost. But, there was a lot of time to get the transactions, so no worries, right?
Well, someone I knew from work waited until the last minute to download his transactions, and it turned out that the credit union had started the switchover a little earlier than scheduled, and he couldn't access three months' worth of transactions. He called me (because I was a volunteer with the credit union at the time) but it was too late at that point.
This just cost him a little time, but time is more valuable than money, right?
9. Canceling a bill / renewal
Ahhh, auto-renewal. Every business's favorite money-maker.
Most businesses will give you a heads-up when they're about to charge your credit card again. (I just got a reminder for a magazine subscription that's up for auto-renewal.)
Miss the deadline, and you've probably got another period of paying for whatever (a service or a subscription). If you didn't actually want it, well, better luck next time!
10. Shutdown of a service you paid for
This is the corollary to #5. You've canceled access to a site or service.
Get what you can out of the site or service before it goes away! If you wait until the last minute, there really isn't time to digest all of the material, watch all the shows, whatever.
(This is also a good way to gauge whether you should buy into a service or not. Will you get your money's worth out of it?)
What other ways can procrastinating cost you money?
