If you want to improve your current debt situation, one of the things you need to address immediately is procrastination. Simply put, this is where you habitually put off doing what you can accomplish now for another day. This can start innocently enough for a lot of people and you might not even notice you are doing it as well. debt situation.
Take your health for example where you might put off an exercise you have planned for today and push it later in the week. You might have a business opportunity but you choose to set that meeting for a much later date because you did not feel like pitching your ideas. It could even be as simple as deciding to order take out rather than cooking dinner which you planned early in the day.
The problem is when it starts to ripple out and affect the way you manage your finances. Procrastination can put your debt situation in an even tighter spot. This is important to note as Fox Business shares that most Americans have seen a decline in their income. This is important to take note of because procrastinating on your finances coupled with a decrease in income does not end well together.
When you are struggling financially, it could push you to just retreat back and put everything off until things pick back up. This is not the ideal mindset when but these things happen. It pays to know about it so you can react quickly and avoid it before it destroys your finances entirely. When this happens, it will be much more challenging to manage your money.
How procrastination affects your debt situation
Debt plays a big part in society and the way you manage it will dictate if you are able to maximize it or if it is running your life. If you begin to procrastinate when it comes to your debt obligations, a lot of things can happen. Here are a few of them worth knowing about.
Missed Payment Deadlines
Business Insider shares that an average American has about $51,900 in debt under their name. That is a huge amount you have to pay back. One thing that can make this more challenging is when you overlook and miss your payment due dates. It might seem harmless but you have to understand that when it happens, it only makes your debt situation a lot worse.
When you miss a payment, there is a good chance that your lender will start to add fees, penalties, and other charges to your next month’s payment. This means that when you get your bill the following month, you could be looking at a higher total payment due than the previous months. What is worse is that if you ignore this or it slips your mind to pay these obligations, they will continue to increase from one month to the next.
One thing you might overlook when missing payments is that it also affects your credit score. There are several factors that credit reporting bureaus look into when computing your score. But one of the biggest factors in your credit report is your payment history. When you keep missing payments, it negatively affects your score. The lower your score, the more challenging it will be to apply for a loan in the future.
Your Debt Balances Balloons
Your debt situation will not improve once you begin to procrastinate when it comes to your payments, In fact, not only will it not improve, it will worsen as well. This is because your debt balance will slowly start to increase over a period of time. The higher the interest rate and other charges you have on your debt accounts, the faster your balance will grow.
If you decide to look the other way, your payment obligation will not go away. It will only keep on getting bigger the longer you avoid it. It will not do your mental health any good as well. This is because you still know at the back of your mind that you are choosing to ignore a financial obligation. This can add to your current stress level which will make it extra difficult for you to focus on the more important things in your finances.
Mismanagement of Finances
When you procrastinate with your finances, you can easily end up mismanaging your finances entirely. You start to put off creating a household budget, managing your payments, or even looking at your monthly statements. When you start to do this, you lose your grip on your finances and begin to mismanage your money.
For one, you will have a more difficult time keeping track of all the payments you need to make. The worst that could happen is your lender exercises their lien over your assets in secure loans. You end up losing your house because you have not been paying your mortgage loan. The government can even garnish your pay when you stop paying your student loans.
How to Avoid Procrastination
Now that you have an idea of what can happen when you begin to procrastinate around your finances, you need to begin managing the problem. Here are a few tips to help you do just that and get back on track.
Break down your goals into simple steps
One reason why you put things off for another day is that your goals seem big. It might scare you enough that you decide to do it some other time. To help you take on this goal and get started, you can break this down into smaller targets. This way, you get to accomplish small feats while working your way into the big one.
If you are saving for a big down payment on a house, you can divide that amount into monthly targets. You can even scale it down even more and aim for weekly targets. The amount now becomes more manageable compared to just looking at the total amount.
Put small rewards along the way
You can also choose to use rewards as a way to motivate you to reach your goals. This can excite you to put in a little more effort and enjoy the reward. But keep in mind that you do not want to undo all the hard work you have put in because of the reward you want to have. You might reward yourself with a new phone after saving a few dollars for the week. That will only put you deeper in debt and not the best way to structure a reward for yourself.
Have an accountability partner
This is one of the tips you can look into if you have someone in your life you know and trust. This can be your husband or wife, your best friend, or even an online community. The way this works is that you tell the other person or group what your goals and plans are. They then help you stay on track by asking you about the progress you are making.
Procrastination can make your debt situation a lot tougher than it has to be but there are things you can do to manage through. Understand and get to the root of the problem so you can identify the action you need to take to stop procrastinating.