When it comes to money, a lot of people think that doing nothing is a safe bet. If you don’t invest, you can’t lose. If you don’t budget, you won’t feel restricted. If you don’t look at your finances, you can’t stress about them, right?
Wrong.
Avoiding financial decisions isn’t just a passive act, it’s an active choice that can cost you big in the long run. Whether it’s letting cash sit in a low-interest savings account, ignoring debt, or simply not planning for the future, financial inaction has consequences. Let’s break down why doing nothing is often the most expensive decision you can make and how to start making moves that protect your future.
The Illusion of Neutrality: Why “No Decision” Is a Decision
It’s easy to believe that avoiding financial decisions is a neutral move. But the reality is that every moment you don’t act, your money is either shrinking in value or missing out on opportunities to grow.
Imagine two people:
- Alex puts off investing, thinking they’ll start “when they’re ready.”
- Jordan starts small, investing just $50 a month.
Even with modest returns, Jordan’s money grows over time thanks to compound interest. Meanwhile, Alex’s money? It sits there, losing value due to inflation (which we’ll get to next). By the time Alex is finally “ready,” they have to work much harder to catch up, if they even can.
The takeaway? Doing nothing is not neutral, it’s an active choice with real financial consequences.
Inflation’s Silent Attack: The Hidden Cost of Waiting
One of the biggest threats to your money is something most people don’t think about daily: inflation.
Inflation is the gradual increase in prices over time. That’s why a gallon of milk cost about $1.60 in 2000 but is closer to $4 today. If your money isn’t growing, it’s effectively shrinking.
Example:
Let’s say you have $10,000 sitting in a basic savings account earning 0.01% interest (which is common at traditional banks). If inflation is 3% per year, that money is actually losing about $300 in value annually, meaning in 10 years, it will have much less purchasing power.
The solution? Put your money to work. Whether it’s investing, starting a high-yield savings account, or simply paying off debt, keeping your money moving is the only way to stay ahead of inflation.
Lost Opportunities: The Real Cost of Not Investing
A lot of people avoid investing because they fear losing money. But what they don’t realize is that not investing is a guaranteed loss, a loss of potential growth.
Example: Investing vs. Waiting
Imagine two friends, Sam and Chris:
- Sam invests $200 a month starting at age 25.
- Chris waits until age 35 to start investing the same amount.
Both earn an average return of 8% per year, but because Sam started 10 years earlier, they end up with nearly $500,000 by retirement, while Chris, despite investing the same amount monthly, only has $250,000.
That’s a $250,000 difference just because Chris waited.
The lesson? Starting small is better than not starting at all. Even if you don’t have much, investing a little today beats waiting for the “perfect” moment.
The Fear Factor: Why People Avoid Financial Decisions
If financial inaction is so costly, why do people avoid making moves? A few common reasons:
1. Fear of Making the Wrong Decision
Many people worry they’ll invest in the wrong stock, pick the wrong retirement plan, or make a mistake. The truth? Not deciding is often the biggest mistake. The best way to learn is by taking small, calculated steps.
2. Lack of Knowledge
Financial jargon can feel overwhelming. But finance isn’t about perfection, it’s about progress. Start with what you know, and build from there.
3. Short-Term Thinking
It’s easy to focus on immediate comfort instead of long-term security. But the earlier you start, the less you have to sacrifice later.
If any of these sound familiar, don’t worry, you’re not alone. The good news? Taking action doesn’t have to be complicated.
Small Steps, Big Impact: How to Take Control Today
You don’t need to be an expert or have thousands of dollars to start making smart financial moves. Here’s what you can do today:
1. Start Investing, Even if It’s Just a Little
- Open a brokerage account and start with index funds.
- Use apps that let you invest spare change.
- If your job offers a 401(k), contribute, even a small percentage.
2. Move Your Money to a High-Yield Savings Account
- Many banks offer 4% or more in interest, compared to traditional banks’ 0.01%.
- This is an easy, risk-free way to fight inflation.
3. Pay Off High-Interest Debt First
- If you have credit card debt with 20%+ interest, paying it off is one of the best “investments” you can make.
- Consider the snowball method (paying small debts first for motivation) or the avalanche method (tackling high-interest debt first).
4. Set Up Automatic Transfers
- Even $10 a week into savings or investments adds up over time.
- Automating finances removes the temptation to procrastinate.
5. Educate Yourself (But Don’t Get Stuck in “Learning Mode”)
- Read books like The Psychology of Money or The Compound Effect.
- Follow finance podcasts or YouTube channels like The Plain Bagel, however, please be careful, understand that many finance channels have an incentive to promote risky investments, so proceed with caution.
- Most importantly: Start applying what you learn.
Final Thoughts: The Best Time to Start Is Now
If you’ve been putting off financial decisions, you’re not alone. But here’s the truth: You don’t need to have everything figured out to start.
Every small step, whether it’s moving your money to a better account, investing a little, or tackling debt, adds up. The worst thing you can do? Nothing.
The cost of doing nothing is real, but so is the reward of taking action. Start today, and your future self will thank you.
The Broke College Student 
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