How to Avoid Financial Procrastination

Combining bite-sized goals with appropriate rewards, makes completing important financial tasks less daunting. Here's how you might even look forward to those tasks over time.

A lazy man yawning while sitting in a reclining chair.

Sometimes when you set a financial goal for yourself, you can become frustrated when you don't achieve immediate results. For example, you might want to save $100 each month. However, when the end of the month comes around, you might become discouraged that you have only saved $50. Instead of feeling disappointed or discouraged, you should realize that your goals were too lofty for your financial situation. By setting bite-sized goals, you can more easily achieve impactful results.

How To Set Bite-Sized Goals

The key to setting a bite-sized goal is to avoid creating milestones that are too lofty, vague, or seem only to focus on "the big picture." Instead, you should start small. Keep the following tips in mind:

  • Break your financial goal down into actionable items.
  • Make goals concrete and manageable.
  • Set-up a series of goals so that you can achieve multiple milestones in a week, month, or year.

To put the above steps into a more tangible example, think about the steps needed to open a savings account. By using the above tips, this task can easily be broken down into small steps.

  1. Research the various bank options.
  2. Fill out the necessary paperwork.
  3. Add start-up money to your account.
  4. Open the account with a target amount in mind for the year's end.
  5. Decide how much money you want to automatically transfer each month.

In five easy steps, suddenly opening a checking account doesn't seem like a "big picture idea," but rather like a manageable financial task

Don't Forget to Reward Yourself Along the Way

Bite-sized goals are only as good as the rewards that you give yourself along the way. By giving yourself small rewards for each bite-sized goal you can avoid financial procrastination and the harmful costs that are associated with it. Whether it is watching the latest episode of your favorite Netflix movie or treating yourself to a dinner with friends, rewards are a great way to help you strive for the next goal. In fact, human behavior studies show that when you are working towards a goal that requires regular discipline, such as reversing financial debt or financial procrastination, you are far more likely to reach your goal if there is also a guaranteed reward.

With this theory in mind, re-examine the open a savings account example from a reward perspective. The rewards for completing each step might be as follows:

  1. Watch your favorite TV show.
  2. Go out to happy hour with a friend.
  3. Read your favorite book.
  4. Take a well-deserved trip.
  5. Spend time hanging out with your favorite people for a carefree afternoon.

Once you can combine bite-sized goals with appropriate rewards, completing important financial tasks doesn't seem like such a hassle. In fact, you might find that you are looking forward to checking off your "financial to-do list," so that you can reach your latest goal and enjoy the subsequent reward.