Procrastination -Part 1 (How it Hurts You, Financially)
Did you know many companies bank on the fact that most people are procrastinators when it comes to certain things? If you think about, you’ve likely been duped by some company making some irresistible goal that bit you in the end. Let’s looks at a few:
Same as Cash Deals
Deal! Signup for our credit card and buy your air conditioner on credit with 6-months same as cash.
Deal! Signup our store card, buy your living room set, get reward points, and 12 months same as cash.
Deal! Sign up for our store card, buy your engagement ring, save 10% now, and get 48 months same as cash.
People fall for it all the time and companies bank on it. They bank on the fact that more times than not, individuals will be lured in with the buy now and pay later offer. Instead of kicking out several hundred dollars or thousands of dollars, they can make the purchase now, enjoy that item now and take their time paying for the item(s) over time. I’m intimately familiar with it, because I fell for all three, above. When that 6 months, 12 months, 24 months, rolled around, I was always scrambling because I knew the interest I was about to be hit with. But I always fell for it again- not too long down the road. Enough people don’t pay in the same as cash time period, that companies continue to make these, “seemingly great deals.”
0% Interest Offers
Deal! Signup for our credit card and get 0% interest on all purchases for 12 months.
Deal! Signup for our credit card and get 0% interest on all transfers and purchases for 18 months.
These seem like irresistible introductory offers. In fact, when I first started being offered 0% interest credit cards, I thought I had arrived to adulthood. I had made such incredibly poor financial choices in the past and I was finally living a responsible life, paying off my former credit cards and paying what I owe when I owed it. So, the 0% deals came and I resisted for a while; but eventually I gave in with high expectations that I was better prepared to get back in the credit game.
I’m not the only one and I didn’t just fall for it once or twice. Using credit, especially 0% credit cards, increases your spending addiction, as Dr. Lynn Richardson would call it. From the surface it’s a win/win scenario. You get to make purchases now, build your credit score (laughing), and then repay it before the 0% term ends. For the few people, who are savvy enough to play the game, they are right. You get to use
someone else’s money, make purchase and never pay interest. Some people routinely use credit cards (even outside of the 0% interest period) and pay off their balances monthly, never paying interest. But that’s not where more people are. Credit card companies would never grow into the massive companies they are, if most people did that. If you have been a victim of using credit in the past, you know how frequently your intentions didn’t work out. That 12-month or 18-month period rolls around and if you have fueled the habit of spending on credit and not paying off your balances, it’s almost impossible to catch up in the end.
Trial Offers- No Obligation, Cancel Anytime
60% off gym membership for first year
3 months free Movie Service
Free 6-month credit monitoring service
It’s always the same. These auto-enrollment deals all boast the same great things: no obligation, cancel at any time. What do they know that you don’t know or don’t believe to be true about yourself? One, you’re going to forget and get hit with an unexpected charge before you are reminded to take action. Even then, there’s a good chance that you will put off taking action until a more convenient time. Two, even if you are reminded that the trial is ending and new rates apply, there’s a high probability that you will not take action. You will excuse that extra $10, $15, $20, $30 fee for months- sometimes, before you finally get fed up and take action.
You tell yourself: it’s not a convenient time, you can’t remember the login information, you don’t feel like sitting on hold, you don’t feel like being bothered right now- besides they already have their money for this month, or some other excuse. By then, these companies have proven the success of their marketing tactics and collected a lot of money you hadn’t planned on spending. It’s profitable enough for them to keep doing it.
Conclusion
Clearly big businesses know people better than we likely want to admit. If you know you are not a disciplined person, who will tickle the date of when you’re introductory offer expires and take proactive measure to cancel enrollment, if you do not wish it to continue, then don’t do it. Don’t throw away tens of dollars or hundreds of dollars because you think somehow this time will be different. Don’t do it unless things really are different. Maybe you are or a debt freedom journey and are learning to make wise financial decision and less susceptible to marketing schemes.
Our desire to play now and pay later, combine with procrastination are the types of things that keep you in poverty. Money going towards conveniences could be going towards saving and debt elimination. Tune in tomorrow to see how and when procrastination can actually work for you.
