Strategy # 3: Procrastination is very expensive

Since procrastination requires no effort on your part, it may be your current “strategy” without you realizing it. If so, it’s a costly approach. Not planning for your future becomes more expensive each year you delay. Starting early provides huge advantages, including:

You develop appropriate spending habits while you are still impressionable.

You’ve undoubtedly heard the expression “It’s tough to teach an old dog new tricks.” It’s hard to move down from a McMansion. But when your housing comparison is living in a small space with a roommate who doesn’t smell quite as well as he should, living alone in a decent apartment in an okay neighborhood will make you happy.

At any age, it’s emotionally easy to increase spending. It’s always much tougher to ratchet down your expectations, especially when you are already living them.

Your responsibilities are relatively limited, making it easier for you to save.

You: Excuse me? I have plenty of responsibilities, including a mortgage payment, a car loan, student loans, and trying to participate in a 401(k) plan. How is it supposedly easier for me to save right now?

To be clear, I said it’s easier to save now than it will be later. I did not say it’s easy to save now. (Besides, no one currently unable to do something ever thinks suddenly doing it would be easy.) Your current financial challenges are, unfortunately, quite common. But just wait until later. Most people dream of a taking a lifelong partner and raising a family. That typically implies a much bigger (and more expensive) living space, an adult out of the workforce for some period of time, more mouths to feed and the resulting bottoms to diaper. It could mean funding a college education or two. So even though some of your current expenses, such as your student loans may go away in time, other expenses will be coming. So you need to find a way, anyway, to start saving something today. Revisit the Top 10 Saving Strategies for some low-hanging fruit.

You can take maximum advantage of the miracle of compounding interest!

The miracle of compounding interest will be the subject of a future post and is nearly an entire chapter in Beyond Paycheck to Paycheck. For now, it’s worth noting that a dollar saved today is worth many times more than a dollar saved many years from now. A little bit of savings today will be worth more in retirement that a lot of savings later. It’s just another reason why procrastination is so very expensive.

So that’s the positive spin. I hoped it gets you going. If not, here’s the brutal reality approach: Waiting costs you big time–it’s nearly impossible to catch up. If you wouldn’t like your coach subbing you in at the top of the ninth inning down ten runs and shouting “Go get ‘em–we need this game!” then don’t wait until you’re a few years old to start saving for retirement. It’s the same thing.