Delayed Gratification

The more you wait for something, the more you will enjoy it. Since this is a personal finance website this article is not about sex, it is about waiting to make those purchases that will improve your quality of life. Now that you have successfully completed your studies and found a job where you are earning more money than ever before, chances are you will want to indulge in some good ol’ self gratification. In case you are unaware of what the term gratification refers to, it is simply a state of being greatly satisfied or rewarding yourself. There is nothing wrong with rewarding the most important person in your world (yourself), but the problem is that most young people feel like rewarding themselves way too often and for no valid reason. Most major companies are capitalizing on this behaviour these days by selling all of kinds of products or services that they tell claim will make your life better or will help you reward yourself. Granted, some of these items could potentially make your life better, until the credit card statement comes in the mail.

What exactly is delayed gratification?

It is simply waiting until you are financially secure to make that purchase that you feel will add great value to your life. The reason this concept is so difficult for most people to grasp is because everything these days can be purchased on credit card and paid for “later.” The problem is that “later” will come back to bite you in the butt and you will end up paying interest on this purchase that added great pleasure to our life a long time ago.

Example of delayed gratification…

To give a relevant example I will discuss a purchase that I am a strong supporter of, vacations. I believe that everyone should go on a vacation at least once a year so that they can recharge their batteries and prevent burnout. Before I go on a vacation I will have it paid for so that when I am on my trip I do not think about paying for the trip. The issue with this is that sometimes it will take me longer to save for a trip, whether it is a month or four months, I do not mind because I will wait until I can fully pay off the trip. The longer I wait for the trip the more satisfying it is, mainly because I know the trip has been paid for.  I am going to Jamaica in December after exams, which I paid for in September. Granted, I did not feel financially secure going on vacation in March so I waited until I saved a decent amount of money. This is a great form of delayed gratification for me, however, now let’s go into where most people go wrong with gratification.

Why is this concept so difficult to grasp?

Almost all major companies and credit card companies offer deals where you have the item now and pay for it later. To apply this concept to vacations it means that you can go on a trip tomorrow but not have to pay for it until the next month or next year. Someone will come across an offer like this and feel that it would be very enjoyable to go an on trip now even though they do not have the money at the moment. This I find to be a horrible idea because you will constantly have the thought of your debt on your mind for most of the trip. Many people will not even think twice about the debt they have just incurred to travel, which is even worse because when they get their credit card statement in the mail the next month it will be a real eye opener.

Vacations are only one example of delayed gratification, it can also be applied to clothing, televisions, cars, etc, All I am saying is next time when you are about to make an expensive purchase on credit card or through any form of loan, stop to think for a minute. Think if your life will go on if you do not make this purchase for another 6 months (or however long it will take you to save) and then do not make the purchase. Wait the 6 months, save the money needed and then go back to make this purchase. I guarantee you will feel so much better knowing that this product is all yours, 100% debt free. Even in a scenario when you purchase real estate, almost nobody ever will have all the money required, but it is crucial to put down at LEAST 20% so that you do not leave the mortgage for the next generation.

Have you ever waited a long time to save for a purchase? Especially while your friends may have gone ahead and just incurred debt to make the purchase?