Action is Key

There are many tips, advice, formulas, and rules of thumb when it comes to personal finance, but none of it matters without action. It is human nature to procrastinate and put things on the back burner if they're not a pressing issue at this moment in time, but doing this could be costly in the long run.It takes real motivation to act on something but sometimes the things that should be motivating enough, just aren't.

For example, it took me years to open an IRA. Yes, years. I'm 27 years old and I just opened an IRA 11 months ago although it had been on my to-do list at least 2 or 3 years.  Obviously the motivator was tax-free growth for my investments, but this wasn't real motivation. You see, thanks to my parents, I already had an investment account in a mutual fund so there wasn't any urgency to get started on an IRA. It wasn't until I read a few books that explained expense ratios and loads that I realized how much it was literally costing me to keep my money in that mutual fund.

Another example is my home owner's insurance. I have owned a condo for 5 years and I am literally just this week buying insurance for the it.  The thing is that it's a condo, so the structure is already insured and paid through my maintenance fee but everything inside isn't. Luckily nothing's happened to my place that would require insurance but 5 years of procrastination! I know, it's crazy. I've been rolling the dice. The only reason I'm finally purchasing it this week is because I was talking to my dad about not having it and he gave me the name and number of his insurance broker. It wasn't until I had a name and number that I pciked up the phone to get finally insurance.

The point in all this is that I get that procrastination is normal, but that's not an excuse for it. I never calculated how much money I wasted in high expense ratios at my old mutual fund but I know I lost money. And luckily nothing catastrophic has happened to my condo but luck only goes so far and it was just dumb not to have it. So when it comes to procrastinating on the things you know you should do, you need to find your own good reason to do them. Obviously the possibility of financial ruin from a fire burning down my condo wasn't a motivating enough reason for me. I just needed to overcome the burden of searching for insurance which as it turns out was easily done by me talking to my dad who then lead me to a broker that did all the searching for me. Easy as cake- after I took the necessary steps.