Procrastination and Personal Finances: Exploring the Roles of Planning and Financial Self-Efficacy

Procrastination is related to unhealthy personal financial behaviors, such as postponing retirement savings, last minute shopping, and not paying bills on time. The present paper explores factors that could explain why procrastinators demonstrate more financial problems compared to non-procrastinators. Study 1 (N = 675) focused on planning, as both procrastination and poor financial habits are negatively related to planning. Results confirmed that procrastination was a significant predictor of personal finances, but the propensity to plan was not. Study 2 (N = 500) explored the roles of procrastination and financial self-efficacy in two facets of financial behavior, financial impulsivity and financial planning. Results indicated that the effect of procrastination on financial behavior was fully mediated by financial self-efficacy. Hence, these results suggest that procrastination operates primarily through its self-efficacy component to impact financial behavior negatively.