What do Willie Nelson, MC Hammer, and Allen Iverson have in common? Well, what their life situations have in common is that it doesn’t matter how much you make, but how much you keep.

To be sure, these individuals came into vast fortunes, only to see their wealth dwindle in a short period of time. And certainly, it’s hard to believe that these individuals didn’t have trusted advisors who urged them to take actions that could help them preserve their fortunes.

But the truth is that there are likely many reasons why these individuals found themselves in their situations, and one reason likely has to do with financial procrastination.

Now, when you hear the word procrastination, you might immediately think of a pejorative, like a bad word or something with negative intent. But the truth is that procrastination simply reflects a subconscious (or sometimes conscious) decision to delay or postpone something you know you should be doing.

Indeed, you’ve likely experienced a moment where you’ve procrastinated on crucial financial work, like paying an important bill, balancing your checkbook, or taking care of some financial obligation, and these delays have likely cost you in lost time or money.

And the unfortunate truth is that in our society today, people who procrastinate are often viewed as lazy or unmotivated, which is why so few of us want to talk about this uncomfortable topic. But the fact is that there are many valid reasons why an individual may choose to put off doing an important task, especially when it comes to their money.

Do you or someone you know struggle with financial procrastination? Do you ever wonder why some people are really good at managing their finances while others get stuck in analysis paralysis and indecision or procrastination? 

Well, even if you only occasionally struggle with putting off paying your bills, gaining some insight into this underlying behavior, understanding how to rebound after a setback, and doing the work to maintain your positive momentum can help you stay the course on your path to mastering your financial independence journey.

Some Common Causes of Financial Procrastination

So then, what causes procrastination when it comes to money?

Well, while there are many reasons why someone may be a financial procrastinator, generally speaking, this act could be related to 1) your thought processes, 2) a struggle for instant gratification, or 3) your body’s signal that something is just not right.

So as we dive deeper, let’s start by taking a look at your mindset’s role in financial procrastination.

Procrastination and Self Efficacy

Now,  when it comes to your mindset, Henry Ford was known to have said that, “whether you can, or you can’t, you’re right.” That’s because when it comes to finding the motivation to do what we know we’re supposed to do, self-efficacy, or the internal belief we have about our ability to accomplish a task or goal, plays a significant role in our ability to get started on essential tasks.

Indeed, when we have high self-efficacy, we are more likely to take on challenging tasks and persist in the face of obstacles. Conversely, when we’re dealing with low self-efficacy, we may be more likely to avoid or delay tasks, particularly those that we perceive as challenging or complex.

That’s why in her book, “Mindset: The New Psychology of Success,” Carol Dweck discusses how self-efficacy and mindset can influence procrastination.

Dweck explains that individuals with a growth mindset tend to have higher levels of self-efficacy. Indeed, these individuals are more likely to view setbacks and failures as opportunities to learn and grow rather than as a reflection of their own innate abilities. As a result, they are less likely to procrastinate, as they have confidence in their ability to succeed.

On the other hand, individuals with a fixed mindset tend to have lower levels of self-efficacy and are more likely to procrastinate. These individuals may avoid tasks or challenges they perceive as difficult or beyond their abilities because they fear failure and negative feedback.

Therefore, if you find yourself procrastinating, ask yourself if your mindset is holding you back from taking the next steps toward what you know you should be doing next.

The Struggle for Instant Gratification

Another factor to consider when you’re trying to identify the underlying factor causing your procrastination is time inconsistency.

So, what is time inconsistency?

Well, have you ever made plans to get up early in the morning, only to find yourself struggling to get out of bed when your alarm goes off? Or how about the last time you made plans to get to the gym on the regular, only to find yourself with other obligations coming up when it’s time to go?

If you’ve found yourself in this situation, then you’re likely already familiar with the concept of time inconsistency and how it can influence procrastination.

Now, time inconsistency is a psychological concept that describes people’s tendency to make present decisions that conflict with their long-term goals. This means that people often make more favorable choices in the short-term, but that can be detrimental to their long-term interests.

For example, imagine an individual who has a long-term goal of improving their credit score but struggles with time inconsistency when it comes to paying bills on time. They may have the intention to pay their bills when they’re due and understand the importance of doing so for their long-term financial goals, but when the time comes to complete their task, they may simply put off the payment in exchange for a short-term reward such as spending money on leisure activities or delaying the discomfort of paying their bills.

Indeed, when it comes to procrastination, time inconsistency can cause people to delay tasks or critical decisions vital to achieving their long-term goals, even if they know that delaying the task will have negative consequences. This likely happens because the immediate rewards of avoiding the task (such as short-term pleasure or relief from anxiety) can be more compelling than the potential long-term benefits of completing the task.

Either way, time inconsistency is just a fancy way of saying that we prefer the immediate benefit of instant gratification over long-term rewards. And when it comes down to it, procrastination can be a coping mechanism for time inconsistency, as an individual delays essential tasks to avoid the immediate discomfort of starting important work. Even so, while it may seem harmless at first, when left unchecked, this behavior can negatively affect their long-term goals and financial well-being.

The Body Relation

One last potential cause for procrastination that we’ll explore is looking at what’s going on in the body. That’s because, in some situations, procrastination, or the act of putting off what we know we should be doing, is often the body’s way of telling us that something bigger is going on behind the scenes.

Indeed, psychologist Dr. Stephen Porges, in his Polyvagal Theory, suggests that procrastination is a form of self-protection when viewed in the context of the body’s nervous system. Now, what this theory suggests is that inside our bodies, we have a special nerve called the vagus nerve that helps us respond to stress and danger. It has three parts, and each part helps our body react in different ways.

The first part, the ventral vagal, or “rest” state, helps us feel safe and calm. When we feel safe, our bodies can “rest and digest” and give us the confidence to take on challenges and meet new people.

The second part, the sympathetic nervous system, or “fight/flight” state, helps us prepare to fight or run away when we feel threatened. This part of the nerve helps us become more alert and ready to act quickly to protect ourselves. When our minds are in this state, we are more likely to take care of our finances from a place of panic, fear, and anxiety as we realize that a bill is past due.

The third part of the nerve, the “freeze” state, is like a last resort. That’s because when we feel like we can’t fight or run away from danger, our bodies can shut down and become very still and quiet. In this state, we’re more likely to feel shame, a sense of helplessness, hopelessness, or utterly trapped. In this state, we have an inability to focus and actually get work done.

Indeed, when the nervous system is dysregulated or underactive, we may experience difficulties in social interactions and have a reduced ability to cope with stressors, leading our bodies to physically shut down and produce what looks like procrastination.

Therefore, if you typically have a growth mindset and rank low in terms of impulsive behaviors but still occasionally struggle with financial procrastination, then take a moment to listen to your body and evaluate what’s going on in your life.

If there are other things going on, like problems at work, challenges in your personal relationships, health issues, or other situations that are increasing your levels of anxiety, then these factors likely will inhibit your ability to take care of money issues until these matters are addressed.

Steps to Move Past Procrastination

So, now that you understand what might be driving your inclination towards procrastination, the next step to actually moving out of this state and towards your desired financial outcomes involves identifying ways to adapt whether your mindset, instant gratification, or your nervous system are causing you to procrastinate.

Shifting Your Mindset

And what can you do when you find yourself procrastinating on managing your finances and paying your bills because you are dealing with self-doubt? Well, recall that self-efficacy is the belief in one’s ability to achieve a specific goal or outcome. When someone experiences self-doubt, they question their ability to succeed or feel uncertain about their competence in a particular area, but there are some things you can do to improve your self-belief and get your finances back on track.

First, you can start by educating yourself about the particular financial matter where you might be struggling. This could involve reading books, articles or taking online courses on topics such as budgeting, investing, and debt management. By learning more about the financial topics that give you anxiety, you can better understand how to manage your money effectively and improve your self-confidence in areas where you might be struggling.

Next, consider whether you’re approaching your situation from a growth or fixed mindset. Remember, individuals with a fixed mindset believe that there’s little they can do to change their present circumstances, and are more inclined towards procrastination. And, what can you do if you find yourself in this situation? Well, to develop a growth mindset, you can take several steps based on Carol Dweck’s book.

Well, to start, embrace challenges and view them as opportunities for growth and learning. Rather than shying away from complex tasks or new experiences, welcome them as chances to develop your skills and abilities. At the same time, recognize that setbacks and failures are a natural part of the learning process and can provide valuable feedback for future efforts.

Then, cultivate a love of learning and approach challenges with a sense of curiosity and a desire to gain new knowledge and skills. Indeed, take the time to focus on the effort and hard work you put into achieving your goals rather than attributing success or failure to innate abilities or talent.

As you go about this work, you’ll also want to be kind and supportive to yourself, even when you encounter setbacks or failures. Dweck points out that developing a growth mindset can be a challenging process, and it’s essential to be kind and compassionate to oneself during this journey. That’s why she suggests you practice self-compassion by treating yourself with the same kindness and support you would offer a close friend or, if you’re a parent, your own child.

Indeed, Dweck goes on to point out that self-criticism and negative self-talk can be detrimental to one’s self-esteem and motivation, and can ultimately hinder growth and progress and undermine a growth mindset. That’s why replacing negative thoughts with more positive and realistic ones that emphasize your strengths and potential is essential to building a growth mindset. At the same time, be open to constructive criticism, and actively seek out feedback from a trusted advisor and use it as an opportunity to learn and grow so you can improve your ability to prudently manage your finances.

Finally, surround yourself with individuals who encourage and support your growth mindset. This approach could include seeking out mentors and role models who exemplify a growth mindset and can provide guidance and support as you work to develop this mindset for yourself.

Dealing with Instant Gratification

Now, let’s take a moment to talk about dealing with instant gratification.

Earlier, we discussed the trouble with time inconsistency and how it can lead individuals to favor a present bias over difficult long-term decisions.

So then, what can you do if you find that you identify with instant gratification as a leading cause of your procrastination? Well, take a page from James Clear.

In his book “Atomic Habits,” Clear provides proven methods for developing healthy habits and overcoming a present bias. And in his book, Clear focuses on creating a system for building habits that are sustainable and effective.

One key takeaway from Atomic Habits is that it’s not about making big changes all at once but about making small, consistent improvements over time. This approach means focusing on small changes to your daily routines that will help you gradually move toward your goals.

For example, if you have a hard time getting started with paying your bills or even reviewing your finances on the regular, then set aside a thirty-minute block of time and do as much as you can within that window. Then, take a break and return to your task if you still have work that needs to be done. This approach can help you tackle a big task that might otherwise seem overwhelming in small, bite-sized pieces.

Another point emphasized by Clear is the importance of focusing on the habit-building process rather than just making the outcome the end-all-be-all. Clear emphasizes that building a habit is not just about achieving a goal but creating a system of actions that will help you consistently achieve your goals over time. That’s why if you procrastinate when it comes to paying your bills, you may want to reframe this task as a ritual that is performed rather than a task that’s marked off a to-do list.

Clear also emphasizes the importance of creating a supportive environment for building habits. This means surrounding yourself with people who will support your goals and help create an environment that makes it easier to stick to your habits.

For example, if you’re trying to be more prudent with your finances, then spending time with individuals who like to talk about how much money they make or spend could tempt you to make poor choices and set you back from your financial goals. While you may not need to find new friends (or maybe you do), at the very least, be mindful of how others can affect your own decision-making process.

Lastly, Clear emphasizes that habits are not just about what you do but about who you become. By building habits that align with your values and goals, you can transform yourself into the person you want to be. To be sure, overcoming a present bias, or desire for instant gratification, means consistently evaluating the long-term benefits of achieving your financial goals and why it’s essential to keep your house in order at all times.

So then, from this perspective, ask yourself, “who do I want to become?” How will your life change if you commit to making this new habit of being disciplined with your money and doing what needs to be done at the right time? More importantly, how will people’s perceptions of you change, and how would that make you feel?

Support Your Nervous System

Finally, if your financial procrastination is tied to life stressors that are putting your body into a freeze state, then you can take a few suggestions from Stephen Porges to get you moving forward.

Now, you’ll recall that according to the Polyvagal Theory, our nervous system exists in three states, 1) rest and digest, 2) fight or flight, and 3) freeze. When we experience trauma or stress, our body’s natural response is to activate the sympathetic nervous system, which can result in feelings of fear or anxiety to act or eventually activate the parasympathetic system, leading to a freeze or shutdown when the situation becomes untenable.

This state of dorsal shutdown can feel overwhelming and paralyzing, but there are ways to help our body transition to a more regulated parasympathetic, or “rest and digest” state.

So then, to move out of a frozen state, what you’ll need to do is activate your fight/flight system, which is responsible for mobilizing your body to respond to stress and danger. Now, at this point you might be asking, why are we going to a stress response if we’re trying to get to the “rest and digest” state?

Well, recall that the nervous system has a primal function to keep us safe. It’s like those moments in a National Geographic episode when a gazelle trapped in the mouth of a lion. With nowhere to go, the gazelle goes into freeze mode as a way to cope with the trauma that it’s about to face. But the moment that the lion gets distracted and lets go, the gazelle can snap back into fight mode in its bid to break free and get to safety.

In other words, the gazelle goes into freeze mode to stay safe, but then it first snaps into fight/flight to get away from the lion before it can eventually return to life as normal in the rest and digest phase.

And, so, how do we move between these states?

Well, one way to activate this system is through physical activity or exercise, which can increase your heart rate and respiration, release adrenaline and other stress hormones, and promote feelings of alertness and energy. For example, going for a brisk walk, heading to the gym, or dancing to music can help stimulate the sympathetic nervous system and promote a sense of activation and help move you out of shutdown mode.

Another way to move out of a dorsal vagal state is through social engagement and connection. Polyvagal theory suggests that social engagement, such as eye contact, facial expressions, vocal tone, and touch, can help regulate the autonomic nervous system and promote feelings of safety and connection.

For example, calling a friend, joining a group activity, or participating in a social event can help stimulate the ventral vagal system, which is responsible for social engagement and connection, and promote a sense of safety and belonging. And if you’re in a place where you’d rather not engage with others, getting out into the public to people-watch can be a safe way to reset your nervous system as well.

Finally, breathing exercises and meditation can also help move out of a dorsal vagal state by promoting relaxation and reducing stress. Slow, deep breathing can stimulate the vagus nerve and promote feelings of relaxation and calm.

Keep the Momentum Going

Alright, so now that we’ve identified potential factors that could be causing your financial procrastination and have offered some suggestions for overcoming them, let’s talk about a few things you can do to build momentum to avoid going off the tracks again.

Create a Conducive Environment

So, what can you do to keep the positive momentum of prudently managing your finances going for the long-term?

Well, to start, consider your environment and how it might affect how you deal with your finances. Marie Kondo, an expert in the art of tidying up and creating a joyful home, believes that your physical environment has a powerful impact on your habits and behaviors. So then, from a financial perspective, here are a few tips from Marie on ideally designing your physical environment to establish new financial habits, such as consistently paying your bills and prudently managing your finances.

First, create a dedicated financial management space in your home. You can do this by designating a specific area in your home for managing your money like a desk or a corner of your living room. And this space should be clean and organized, with all the tools and documents you need to manage your money easily accessible.

Next, use visual cues to remind yourself to pay bills, review financial statements, rebalance investments or take care of other essential financial tasks. You can do this by placing a brightly colored sticky note or a decorative object in your financial management space to remind you of when it’s time to take care of the essentials, and make these habits more automatic.

Also be sure to make it a pleasant experience by playing music, lighting a candle, or sipping a cup of your favorite drink while you take care of your finances. This way, paying bills doesn’t have to be a chore, and you may even come to look forward to the experience.

Create New Habits, But Start Small

Now, earlier, we discussed James Clear’s take on how habits can help overcome procrastination. Another take on habits comes from Charles Duhigg, who emphasizes the importance of starting small in his book “The Power of Habit.” And Duhigg suggests that the key to forming new habits is to focus on small wins that give you a sense of progress and accomplishment.

For example, if you’re trying to build a habit of going to the gym regularly, start by committing to just 10 minutes of exercise each day. In a similar way, if you have trouble with paying your bills or staying on top of your financial accounts, try paying one bill or reviewing one financial account per day.

The idea here is that once you’ve established the habit, you can gradually increase the amount of time you spend on it. This way, you’re starting small, but you’re building towards a larger goal.

Another key principle of habit formation is the habit loop, which consists of three parts: the cue, the routine, and the reward. The cue is the trigger that sets off the habit, the routine is the behavior or action that follows, and the reward is the positive outcome that reinforces the habit.

To establish a new habit of paying your bills on time, for example, you may want to consider creating a new habit loop. To accomplish this outcome, start by identifying a cue that will trigger you to pay your bills. This could be something as simple as setting a reminder on your phone or marking your calendar with the due date of your bills.

Then, once you have a cue in place, establish a routine for paying your bills. This could involve setting aside a specific time each week to pay your bills or automating your bill payments to automatically deduct them from your account.

Finally, make sure you reward yourself for paying your bills on time. This reward system could be something as simple as treating yourself to a favorite snack or taking a few minutes to relax and enjoy a cup of your favorite drink after you’ve paid your bills.

By creating a new habit loop for paying your bills, you can establish a new habit that will help you stay on top of your finances and avoid late fees and other financial penalties. With practice and persistence, you can make this new habit a permanent part of your life and enjoy the benefits of better financial management.

Treat Yourself

Finally, make sure you don’t miss out on the earlier point about rewarding yourself for the progress you’re making. Indeed, in “18 Minutes: Find Your Focus, Master Distraction, and Get the Right Things Done,” Peter Bregman emphasizes the importance of incorporating rewards into the habit-creation process as a way to reinforce positive behavior.

According to Bregman, when we engage in a behavior that we find rewarding, we are more likely to repeat that behavior in the future. Therefore, he suggests that we identify specific rewards that we can give ourselves for completing a desired behavior or task.

For example, if your goal is to review your bank account transactions once a week, you might reward yourself with a pizza delivery or takeout from your favorite restaurant. Alternatively, if your goal is to balance your checkbook by a specific deadline, you might reward yourself with a night on the town or a big-ticket purchase once you’ve finished your work.

Bregman also emphasizes the importance of making the rewards tangible and immediate. Indeed, rather than waiting for a long-term goal to be achieved, he suggests that we reward ourselves for making progress along the way. Again, it’s the small wins on a daily and weekly basis that move us closer to our long-term financial goals.

By incorporating rewards into the habit-creation process, Bregman believes that we can create positive habits that are sustainable and enjoyable rather than feeling like a chore. Additionally, he suggests that we track our progress and celebrate our successes, which can also serve as a form of reward and motivation to continue positive behaviors.

Is Financial Procrastination Putting Your Life Plans Off Track?

Make no mistake, financial procrastination can significantly impact your money and relationships if left unchecked. It can lead to missed payments, late fees, and even ruin relationships. And while there are many reasons why people procrastinate, understanding the underlying causes can help you take steps to overcome this behavior.

These approaches include addressing mindset, working to avoid instant gratification, and by listening to your body, you can start to break free from the cycle of financial procrastination and take control of your finances. Remember, it’s never too late to start taking action and making positive changes in your financial life.

Indeed, by shifting towards a growth mindset, developing sustainable habits, and supporting your nervous system, you can overcome the barriers that are preventing you from taking action and moving towards your desired financial outcomes.

Remember, sometimes all it takes is small, consistent steps and being kind and compassionate towards yourself during this process to make sustainable gains. And, with a little patience and persistence, you can take one step closer to becoming the master of your financial independence journey.