Canadian Personal Finance Blog

Yet another example of what happens when I procrastinate has reinforced my belief that as a tactic in life procrastination is highly underrated. Many things in life will either go away, or rectify themselves if you give them time.

Can procrastination be a viable financial planning concept?

Procrastination Works

In these situation procrastination may actually help you out:

• Large purchases such as cars or houses. By not doing anything you may actually end up keeping large amounts of money in your investment vehicles and gaining value, and you aren’t paying down large debts that you have accrued.
• Selling stocks when they are down. If you procrastinated through this last bit of bad times, you most likely held onto some stock that will regain it’s value and appreciate more.
• Get rich schemes from friends and family, if you wait long enough you will have “missed the boat” but will still have your money too.

Procrastination is Very Bad

When is procrastination a bad strategy?

• Ignoring paying of bills, this is a very bad thing. If you don’t pay your credit card or your utility bills or any other monthly bills, you will end up with a large debt and most likely living in a dark and cold home.
• Not putting money in your RRSP until February 33rd is a bad use of procrastination, put your RRSP money in as early and often as you can.
• Not paying your taxes on time (municipal, federal, etc.,) is really kind of bad too (luckily in Canada we don’t have the IRS and their sweeping powers, however the CCRA can do stuff to you too).
• Not having an emergency plan financially.

Really?

I guess you can see that procrastination may not be the best concept for your financial plan, but remember it can be your friend sometimes, just don’t use it as your only weapon or tactic in your Financial Plan. Pay what needs to be paid now, but think about those big purchases and maybe see if time can help you with that part of your plan.

Begins with a single step, but if we don’t take a second step, the journey is only one step!

I am notorious for great plans and hopes and such, and starting them, and then they “die on the vine”, and I come back to them 6 months later feeling guilty that I didn’t persevere with them and continued on with them. Now this isn’t for all things, but I think this is what happens when I try to do something “synthetic” that I don’t believe in, that I believe I can force myself to live up to.

If you are going to start a financial plan, or a debt reduction plan, you need to know that you are going to keep it up and live it. If you don’t believe in it, you won’t do it, it’s just that simple.

Deep thoughts, for a Saturday, but I am enjoying a Saturday at home, so it isn’t that bad. –C8j

Well if you keep doing that you might be priced right out of the market, or you might be lucky and the bubble might finally burst in your area, and you might be able to pick up a cheap(er) house. Right now, the answer is keep waiting because new housing prices have gone up yet again (our friends from Stats Canada report). New housing prices jumped 0.3% in January making the year over year price jump for the previous twelve months 10.1% (down from 10.7% in December). This means if you were going to buy a house last year, but procrastinated a year, you now have to pay 10.1% more. Unless you found an amazing investment (like real estate you are farther behind again.

In Ottawa/Gatineau we were lucky in that we had a monthly drop of 0.2% which is nice to see, but if you lived in Edmonton, forget it, your monthly priced index jumped over 1%! Holy crap! Luckily year over year Edmonton wasn’t the most insane (at over 40%), Calgary wins that honour of 40.*% year over year price increases.

It’s interesting because in the states economists have been commenting about the “bubble bursting” in home sales, yet here in Canada, the sales just keep rolling along.

It’s interesting that neither major political party in Canada has mentioned anything about this increasing cost of buying a house and what they’d do about it. Wonder why not?

So in what other financial areas would procrastination be a good strategy?

Bill payment? Yes, BUT, I am not saying don’t pay your bills on time, what I am saying is pay your bills on time (not early). Keep the money yourself, and hopefully let it grow in some fashion (unless an early payment would save you money on interest charges). I don’t want someone saying I said don’t pay your bills until they are late, what I am saying is don’t pay them early, unless you make money on the deal.

Procrastination is never a good thing for large companies when they are supposed to be posting their fourth quarter results, as we can see here.

CCRA has made sure we’ll have to procrastinate a little longer if we want to file our taxes on line, because that option doesn’t work right now. Whoops, and I actually did want to get that out of the way this week, guess I’ll have to wait now.

Need to think about this a bit more, any other good procrastination ideas out there? –C8j