How Financial Passivity Has Cost Me

September 23, 2013

I would generally consider responsibility to be one of my strong suits.

My dad used to teach classes about getting out of debt, so proper money management became something I paid attention to at an early age. I learned the importance of paying credit card balances monthly, saving diligently, and never spending more than what I was taking in.

But pair this with occasional bouts of avoidance – avoiding stress, conflict, and anything I find unsettling – and sometimes that responsible nature is a bit overshadowed.

I recently made a “Financial To-Do List,” and while the prospect of finally being fully organized in this area of my life made me giddy, the list of tasks never actually materialized. In fact, the list never even made it to the printer. As a result, I just began avoiding anything and everything I needed to do with my finances.

And then, I began to notice how much my financial passivity (laziness?) has cost me in the past six months.

Being on Auto-Pilot (and Excelling at Avoidance)

I have a tendency to check my bank account only twice a month – once at the beginning of the month after I’ve been paid (and I feel comfortable with the high balance), and once at the end of the month to see how I fared with spending (i.e. how off I was on my budget).

Anything in between those two times gives me anxiety. If I’ve already overspent and it’s only the middle of the month, I’d rather not deal with the reality that I’ll have to wait another two weeks until I can comfortably spend again.

So near the end of last month, I noticed a renewal charge for a subscription service I had been intending to cancel that was a whopping $150. When was it charged? Nearly three weeks prior.

I called the vendor, and after admitting that it was my mistake, they graciously agreed to offer a refund. But, since I had waited nearly a month to call about the charge, they could only refund $100.

Cost: $50

Not Shopping Around

I’ve had the same insurance agent since I started driving ten years ago, and while I’ve never had an issue with the service or the coverage, I had also never looked around to see if I could be saving any money.

Six months ago I started trolling around for new insurance. Then, after realizing how time consuming making the switch would actually be (or how time consuming I thought it would be), I put it on the back burner.

A week ago, I finally bit the bullet and found insurance (auto and renters) that was $250+ cheaper every six months than what I had been paying. If I had gone through with it when I had originally been looking, I could have pocketed those savings instead of forking them over to my former insurance company.

Cost: $250+

Not Paying Attention

Taking my dad’s advice, I very rarely carry a balance on my credit card – unless I’m in avoidance/not paying attention mode.

Last month I charged a pricey hotel room for a friend’s wedding next year to my card, with the expectation that I would collect money for the room from my friends before the bill came due.

Since I generally always pay the balance of the card on the 1st of the month – a week or so before it’s actually due – I never bothered to actually pay attention to the due date. I paid my portion of the bill and waited to receive the remainder. Instead of double-checking the due date, I paid on the day I thought it was due (which was late, apparently), and was promptly charged $3.70 in interest.

Not a hefty amount, but still not how I’d like to spend my money.

Cost: $3.70

Leaving Money on the Table

When I first started my job nearly 10 months ago, I remember sitting in HR listening diligently to all the information about our 401(k) plan. My responsible brain told me to get right on it and sign up.

But, as we moved on to other things, and I worked to get acquainted with my new position, I promptly forgot about the 401(k) talk. Then, when I did remember, I didn’t feel like going through the process of signing up. Then I forgot again.

Then, after realizing that I was leaving the employer match on the table, I kicked myself. Hard.

I eventually signed up seven months in to my new position – one month after I would have been eligible to receive the match had I only signed up from the get-go. Now I need to wait until I hit that six month participation mark.

Cost: $500+ (+ possible investment gains)

The amount of time it takes to tackle these things before they become an issue is negligible compared to the amount of money lost. I think it’s a matter of facing one thing at a time – and for me, that was starting with a freshly printed version of my financial to-do list.

Baby steps, people. Baby steps.

What financial tasks have you been avoiding?