

Are you guilty of these mistakes as well?


Americans certainly aren't strangers to procrastination, whether in the form of work-related assignments or life tasks, like completing our taxes. But when it comes to financial matters, we're putting off a host of important items that deserve our immediate attention. Here are the top five things Americans tend to procrastinate on as compiled by Fidelity -- and why we need to do better.

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1. Creating a budget

A good 30% of Americans have yet to create a budget, even though it's one of the most effective money management tools out there. In fact, without a budget, you're apt to have a hard time determining where your money is going, so if you're missing that key document or spreadsheet, now's the time to get moving. Just list your recurring monthly expenses, factor in one-time expenses (like that insurance payment you make once a year), and compare your total spending to your take-home pay. If the numbers don't line up well -- meaning, you're not able to save at least 10% of your earnings -- then it's a sign that you'll need to cut corners.

2. Creating or updating a will or estate plan

It's not just wealthy folks who need a will or estate plan, yet 30% of U.S. adults have been holding off on addressing that need. As long as you have assets and want them distributed a certain way in the event of your death, you need a will in place outlining those wishes. Thankfully, creating one is easy -- you can even do it yourself online, though in many cases, you're better off hiring a lawyer to draft one for you. Most attorneys charge a flat fee for wills unless your situation is particularly complex.

Along these lines, it pays to do some estate planning if your assets are sizable and you want to protect your heirs from the complex process that is probate. Though an attorney can help you navigate your options, it pays to read up on trusts and how they work.

3. Building an emergency fund

The fact that 27% of Americans have yet to establish emergency savings is hugely problematic. Without that safety net, you risk racking up costly credit card debt the moment you lose your job, fall ill, or encounter an unplanned bill that your typical paycheck can't cover. At a minimum, you should aim to have three months' worth of living expenses available in the bank, and for better protection, you might aim for six months' worth. Where will that money come from? Once you have the budget we talked about earlier, you can identify ways to reduce your spending and free up cash. Or, you might need to consider a temporary side gig to drum up extra money. Just don't keep delaying, because you never know when a financial emergency might strike.

4. Paying off debt

An estimated 26% of Americans are procrastinating on paying off debt. But that means they're throwing away more and more money by the day. Imagine you're looking at a $3,000 credit card balance you've yet to tackle. If it ends up taking you three years to pay it off at 20% interest, you'll throw out over $1,000. Pay it off in one year instead, and your interest costs will total just $334. And that's reason enough to start chipping away.

5. Saving for retirement

Putting off retirement savings is one of the costliest mistakes you might make during your working years, yet 25% of Americans are doing just that. The problem with delaying those retirement plan contributions is that for each year you wait, you lose out on growth opportunity for your money.

Case in point: If you were to contribute $300 a month to a retirement plan over a 40-year period, you'd wind up with roughly $719,000 if your investments were to generate an average annual 7% return during that time. Wait just five years to start contributing that same amount, and you'll be looking at just $498,000, assuming that same 7% average annual return.

Now you may be thinking: "Where did that $221,000 go?" After all, delaying five years in this scenario means contributing just $18,000 less out of pocket. But because you're also losing out on critical years of compounding, you wind up with far less money -- which is why you can't afford to wait to build that nest egg.

Whether you've been procrastinating on one of the above items or all, consider this your friendly but insistent wake-up call: The time to get moving is now. Otherwise, you risk damaging your finances, hurting your family, and losing out on some major savings opportunities.

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