How to keep procrastination from interfering with your debt payments

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What consumes most of your time when you think about how you manage your money? In conversations with clients, the initial response often comes with a lighthearted “spending it.”

Upon reflection, they usually explain their organizational habits or lack thereof. They might mention colour-coding spreadsheets, labelling new folders, sorting receipts, researching tips or strategies and experimenting with new apps, or they might pull a well-worn notepad out of their pocket to show me their tracking.

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There’s no doubt that dedicating some time to getting organized is worthwhile. But the tipping point is when getting organized takes on a life of its own and leads to an illusion of productivity.

The same is true of dealing with debt if the lack of actual progress leads to an increase in what you owe. If you spend more time planning your payments than making them, here are some tips to help turn that around.

Think about your spending

Financial choices tend to be guided more by emotions than by mathematical reasoning. It’s easy to spot this with our spending when we make impulsive purchases or don’t stick to our grocery shopping list, but it also happens when we try to figure out how to pay for it all. Suddenly, that extra few hundred dollars we didn’t expect on our paycheque gets earmarked for entertainment or a big-box store, rather than paying off high-interest debt on a credit card.

To move past this, get into the habit of jotting down your thoughts on spending when you have them. This will clear your brain and give you space to think more clearly without losing track of those thoughts.

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For example, if your favourite retailer emails you to announce a weekend sale and you discover it has what you want, rather than thinking about it, jot it down. Keep a small notebook with you, start a list in your phone, mark it into your calendar or snooze the email to pop up a day or two later when you have the time to determine if you can afford what you want to buy or not.

At the grocery store, add what you want, not need, to buy to the end of your list and if you still want those items when you’re done shopping, circle back to pick them up.

Spending money feels good and the anticipation of getting what we want can be addicting. By inserting a pause between thinking about it and following through, you give yourself the opportunity to move your choice from the emotional to the mathematical.

Prioritize debts based on personal motivations

With space to think about your spending style, the next step is to prioritize how to make your debt payments. This is where most people can use some help.

Start by gathering your most recent statements. Keep your phone handy to access necessary apps and then jot down how much you owe, what your payments are and the interest rate on it. If you’re a homeowner, exclude your mortgage from this exercise. Finally, grab your calculator and tally it up.

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Allocate a specific time slot in your calendar for this task. This will help you avoid procrastinating, as well as eliminate excuses that you don’t have enough time. Treating this time as a non-negotiable appointment, such as going to the dentist, gives you the dedicated space you need for it.

After creating your list, consider if any debts require immediate action. For example, deal with any utility bills less than approximately $200 right away. Debts owed to the Canada Revenue Agency also need special attention. Then, reflect on your debt repayment personality: are you inclined towards the snowball or avalanche method?

If experiencing quick success by eliminating smaller debts first keeps you motivated, then the snowball approach suits you. Conversely, if high interest rates are your main concern and you’d rather tackle the most expensive debts first, the avalanche method is your match.

Both strategies are effective for organizing your debts for repayment; the choice depends on your personal motivation style.

Choose your ideal budgeting method

How quickly you overcome “procrastination through organization” hinges on having a budget that reflects your present situation. Think back to the email about the sale on the weekend. A budget would tell you how much you can afford to spend or if it would be prudent to wait.

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Fortunately, creating a budget isn’t difficult. It’s simply a plan for how to spend your money, with various budgeting methods available to match your unique motivational needs.

Choosing the method that aligns with your style is key to transforming your plans into tangible progress. For those who prefer a hands-on way of managing their money, the envelope or cash-stuffing methods are effective. If you’re detail-oriented and favour planning, a spreadsheet could be your ideal tool.

Budgeting apps are available through your online banking platform and entire blogs are dedicated to budgeting tips and tricks. If the process seems daunting, start with a basic pencil and paper outline and work up from there as you gain confidence.

By devoting focused effort upfront, you can set your plans in motion and let them unfold with minimal ongoing effort.

Sandra Fry is a Winnipeg-based credit counsellor at Credit Counselling Society, a non-profit organization that has helped Canadians manage debt for more than 27 years.

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