Throw out the too-hard basket when it comes to your money

It’s been described as “the thief of time” and it also does a pretty good job of stealing your money, or at least your future wealth.

The too-hard basket is familiar for many of us, especially when it comes to our finances.

We’ll toss plenty of stuff into it — household chores, fitness goals, relationships — and yet the basket still wants more.

Author Charles Dickens described procrastination as “the thief of time”, but it’s also a thief of your money. If you spend years putting off doing something positive financially, you may never catch up.

That’s because the powerful benefits of compound interest multiply the longer you hold shares, real estate or superannuation.

• Get the best interest rate on savings accounts

• Bust a tax move now but beware the election

It’s a similar story with debt. Letting your loans multiply, while you procrastinate about paying them off sooner because it seems too hard, will make the debt burden bigger and recovery even harder.

I’m guilty of shoving financial stuff in the too-hard basket in recent months. I was supposed to revisit my superannuation investments six months ago but have constantly found other, more urgent, things to do.

That lack of action has probably cost me at least $3000 in missed investment growth since the start of the year.

This basket is much more enjoyable and rewarding than the too-hard basket. Picture: Supplied

And 20 years from now, when I’m ready to retire, that missed $3000 will have compounded to a missed $15,000 — enough to pay for an overseas holiday.

Fortunately psychologists recommend some pretty good strategies to overcome financial procrastination and build a wealthier future.

Here are some of them.

WRITE DOWN YOUR GOALS

Without a target and a written plan about how to get there, how are you going to know whether you’re on track? I’ve had a list of life goals stuck on a wall at home for years and it’s a constant reminder to try to achieve things that are important. (But it didn’t solve my superannuation slackness)

WORK OUT HOW TO GET THERE

There are many free financial calculators online that help you work out how much your super should grow, how quickly your mortgage will disappear if you make extra repayments, and the effects of compound interest on your savings and investments. Check out moneysmart.gov.au.

TELL OTHER PEOPLE

Use some peer pressure to prevent procrastination by sharing your goals and financial targets with others. Most of us want to impress others, so that added motivation might be enough to keep you focused.

START WITH JUST 30 MINUTES

Everybody can spare half an hour, right? Resolve to spend just 30 minutes today working on one financial goal — or simply creating a list. Getting started is always the hardest part, and don’t expect it to be perfect. Just do something.

EXPECT TO BE CONFUSED

Starting something new can feel overwhelming, but if you expect that feeling it won’t be too painful. Nobody likes to fail, but every failure is a step in the learning process. Fight procrastination with lots of small steps and your too-hard basket will be a thing of the past.

That’s it. I’m going to get stuck into my super today. That’s the last overseas holiday I’m going to miss out on in retirement. What about you?

@keanemoney