Financial Education can't Overcome Procrastination and YOLO
Oct 04 2021 1
Oct 04 2021 1

You might have heard Enriched Academy Co-founder Kevin Cochran explaining how YOLO (You Only Live Once) is the most expensive word in the English language. Kevin has a great point – justifying clearly unaffordable purchases with a YOLO attitude usually leads to a pile of very expensive credit card debt and more than a little regret down the road.

However, YOLO has a contender for the expensive word title, and that contender is procrastination. We are huge believers in education, fact finding, and analysis before making any important financial decisions, but at some point, you have to take action. Whether it’s opening an online brokerage account, meeting with a financial coach, or simply inputting your monthly household expenditures into a spreadsheet, you need to get moving.

The cost of procrastination when it comes to getting your finances in order is easy to overlook, so we are making it crystal clear by highlighting six issues where failing to act is definitely going to come back and haunt you!

Attacking your debt problem
Throwing everything you have to pay off a 3% mortgage doesn't make financial sense for most people. However, if you have higher interest credit card debt, car loans, or a line of credit that you are in no hurry to eliminate, you need to look at how much it is costing you. Once you see how much money you are wasting on interest every year and how many years (not months) it will take to pay back, your laissez-fair attitude to eliminating that debt will likely change.

Starting your retirement planning
Too little, too late is the story for many Canadians when it comes to funding their retirement. CPP and OAS aren’t enough to save you. The good news is you don’t need a comprehensive plan to get started. For now, if you have no plan or don’t know what to do first, open a TFSA and focus on maxing out the contributions every year and invest in an index fund. You can even automate the process with a robo-advisor and make it as easy as paying the phone bill.

Analyzing expenses and budgeting
Next month is not the time to start figuring out where your money goes every month and where you could/should/need to cut back on spending. The time to get started is today, and it has never been easier with hundreds of online applications and spreadsheet software, or you can go old school with pen, paper and calculator. Enriched Academy has a number of easy-to-use proprietary tools in our programs to help you crunch the numbers.

Getting started with investing
For many of us, it’s hard to get over the risk-aversion and fear of loss that goes with putting our hard-earned dollars into the markets. You need to be comfortable with your decision to invest and knowledgeable of strategies to mitigate the risk, but you also have to realize that holding cash at the interest rates we have seen over the last several years is not going create much of a retirement fund. The TSX was hovering around 5000 in August of 1996 and is just over 20,000 today. Had you invested $300/month for that 25-year period and achieved average market returns, you would have upwards of $500K today.


 

Creating an emergency cash reserve and a will
Two things you never know when you might need, but if the pandemic taught us anything, it was to prepare for the worst. Your income could unexpectedly and very easily disappear for a number of reasons, so you need to have enough cash on hand to tide you over for a few months. As for a will, they are pretty easy to get these days and there isn't any valid excuse for not having one, especially compared to the mess it leaves behind for your loved ones if you die without one.

Our goal at Enriched Academy is to educate and inspire you to take control of your financial life. We do our best to prepare you and get you moving, but it’s up to you to ensure procrastination and YOLO are not holding you back from reaching your financial goals!



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