It ‘s amazing how a few minutes’ time delay can make a major difference to an entire day. This realisation struck me on a recent bus trip to the country. The driver of the vehicle turned up about 15 minutes late for work, and in his attempt to make up for lost time, he exceeded the speed limit and was stopped by the highway police.

The driver ended up delaying his journey by several more minutes and received a traffic ticket to add to his troubles. When we finally reached our destination he admitted to his team member that every time he was a little late he got caught by the police! As I left the bus, I reflected on the fact that lost time can also multiply problems in our financial lives.

One of the biggest financial misconceptions that many of us entertain is the belief that we have all the time in the world to do the right things with our money. When we spend our money frivolously or procrastinate on taking action on our goals, we usually think that we will be just fine if we save later or start working on our plans at another time.

Time does not tarry

While the saying ‘it’s better late than never’ will still apply whenever you are ready to take steps to actualise your financial goals, the reality is that it will be very difficult for you to recover from the negative effects of lost time on the growth of your money. Let’s look at an example of how delaying on saving can lead to lost interest income.

Best friends Camille and Sandra both secure their first jobs at age 21 and earn similar salaries. Camille decides to immediately start saving J$5,000 every month and earns an after-tax interest rate of four per cent, compounded monthly. After ten years of consistent saving with this return, she has in excess of J$736,000 in her account, of which over J$136,000 is interest earned.

Sandra figures that she has enough time on her side to enjoy life first and save later. After five years, she finally starts putting aside J$10,000 monthly and earns the same interest rate as Camille. At age 31, her account balance is just over J$664,000, with accrued interest of about J$64,000.

Although they both save the same amount of money, ‘early-bird saver’ Camille gains more than J$72,000 in extra interest than Sandra who delays saving by five years. In fact, after 15 years Camille will have saved $900,000 and earned about $328,000 in interest. At that time, Sandra will have saved more money, $1.2 million, but still earned less interest of around $273,000.

Procrastination creates problems

In everyday life, there are several other instances where a little laziness or chronic procrastination can create bigger challenges. Have you ever had a small tear appear in a garment, or had a shoe tip become loose? Dealing with it right away would take little time or effort; but if you’re like me, you may probably leave it for an extended period without addressing the problem.

If you repeatedly ignore the small damage, it may eventually cause the item of clothing to give way at the worst possible time, such as at an important function! If only you had made that proverbial stitch in time, you could have avoided the ruin of the outfit and possible embarrassment that may have occurred from your lack of timely action.

While overlooking a torn seam or broken heel might be mildly inconvenient, ignoring or procrastinating about important money issues can lead to major setbacks in your financial goals. As we have seen, delayed saving and lost interest can dramatically affect your ability to amass enough money to meet your financial targets.

Just like the extra effort and cost that will be required to fix a large tear in your clothing or a damaged shoe, you will need to put more money aside and invest more aggressively in order to play catchup on your goals. You definitely give up a lot when you lose the advantage of time with your money.

Desperation is destructive

Unfortunately, many people will panic when they realise how difficult it will be for them to achieve their financial objectives in the little time they have left to save. This desperation may lead them to take unwise investing risks; all too often, it results in more loss instead of the intended gain.

Some persons also procrastinate to their detriment with regards to their debt problems. Instead of addressing their inability to meet their loan payments, they ignore the past due letters and avoid their creditors’ telephone calls. This only leads to increased penalties and ballooning debt balances which could have been averted by immediately contacting the lending institutions for a solution.

If you recognise that you have not made the best use of your time, don’t despair. While it’s true that you can’t turn back the clock, you can still wind it up again by making the necessary adjustments to your attitudes and actions around money.

Copyright © 2011 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, December 1, 2011

Read another article about Procrastination and Money:

Is Procrastination Destroying Your Financial Dreams?

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Cherryl is a money coach and business mentor, and founder of Financially S.M.A.R.T. Services. See more of her work at www.entrepreneursinjamaica.com and www.financiallysmartonline.com. Contact Cherryl