3 Biggest Financial Procrastinations

financial-prioritiesWhen it comes to financial matters, there always seems to be something higher on the priority list. You tell yourself “I’ll get it to next month”.  Then next month becomes next year and so on.  Financial procrastination is a serious issue plaguing many Americans.   From penalties and interest to the emotional stress of compromising goals, failing to address your financial to-dos can be costly.   As Abraham Lincoln once said “You cannot escape the responsibility of tomorrow by evading it today.”  A proactive approach to addressing the most common procrastinations may help you pursue your goals in life.


Let’s face it – no one enjoys preparing or paying taxes. The unpleasantries associated with taxes and the IRS cause many to delay organizing their estimated payments and returns, often leading to late filings and the accumulation of excessive interest and penalties.  Procrastination in this department will not only affect your stress, but it may also hit your wallet. The IRS’s failure-to-file penalty will be triggered due to a late filing and is typically 5 percent of the unpaid taxes for each month or part of a month that a tax return is late. According to the IRS, the penalty begins accruing the day after the filing due date and can be as much as 25 percent of your unpaid taxes. In contrast, taxpayers paying after the deadline may face a failure-to-pay penalty in the amount of 0.5 percent per month of the unpaid tax amount.  It is important to remember that even if you are unable to pay your tax, you should still file your taxes.  Remember, filing IRS Form 4868, Application for Extension for Time To file will provide a six month extension to October 15th.

So how can you overcome inertia in this area? First, work on staying organized throughout the year.  Rather than scrambling at the last minute, consider developing a system for your tax prep.  Next, enlist the assistance of a CPA or bookkeeper.  While you may have to invest in getting assistance, the confidence that may come from having a professional on your team can be invaluable when next tax year arrives.

Estate planning

Who should be the children’s guardian, trustee for the trust and the executor of the will? How can you proactively reduce estate taxes while providing liquidity to beneficiaries?   The challenge in answering these questions causes estate planning to be one of the most common financial procrastinations.  In fact, according to a survey by Rocket Lawyer, for the nearly 58% of Baby Boomers that do not have a will, procrastination was the number one reason they didn’t address this issue.  Why can estate planning be so overwhelming?

Individuals often get stuck in the details of how to accomplish certain objectives. For example, if you are building your dream home it is often best to provide an architect with your vision for features of the property rather than letting the mechanics of how it is built overwhelm you.  Try the same approach with your estate planning attorney.  Provide the vision of what you want to see happen and let your financial team draft the details of how to make it happen.  Rather than scramble to complete these documents before a major surgical procedure or long-distance trip, addressing estate planning issues proactively may be beneficial.

Life Insurance & long term care insurance

Addressing life insurance and long term care needs often fall to the bottom of the list too. Despite the fact that many people procrastinate in this area, there is no denying their importance.  According to a recent LIMRA insurance survey, 86 percent of those surveyed stated that they agree that most people would require some amount of life insurance coverage and 25 percent wish their spouse or partner would purchase additional insurance. While, people do understand the importance of addressing these needs, many wait until coverage becomes cost prohibitive to take action. As we age, the cost of insurance increases exponentially to the point when it can become cost prohibitive if you wait too long.

It is also common for individuals and couples to wait until their 70s to begin thinking about Long term care insurance. Once again, waiting can be costly as premiums may be unmanageable later in life.  Additionally, it may not be possible to be approved due to health issues and underwriting challenges.

Thinking ahead is one of the best ways to approach life and long term care insurance. It may be best to purchase coverage when it is affordable – usually before these issues are top of mind.  Ideally, life insurance should be reviewed every few years to ensure that your coverage is sufficient to address the needs of loved ones while also taking into consideration group benefits.  On the other hand, long term care insurance is often best addressed in your 50s and early 60s.  If you are concerned about life and long term care insurance, you may want to consider utilizing a hybrid policy.  Consider speaking to your financial advisor to assess your options.

While financial procrastination can be costly, careful planning may help you tackle the most common challenges. There is no substitute for personal advice and since everyone’s situation is unique, consider speaking to your tax, legal and financial advisers to determine the most appropriate approach for your specific situation.


Kurt J. Rossi, MBA, CFP®, CRPC®, AIF® is a CERTIFIED FINANCIAL PLANNERtm Practitioner & Wealth Advisor.  He can be reached for questions at 732-280-7550, kurt.rossi@Independentwm.com, www.bringyourfinancestolife.com & www.Independentwm.com. LPL Financial Member FINRA/SIPC.