Have you seen the way people have been acting the last few years?
They see something they want and they have to have it immediately.
Whether it is an iPad or a Starbucks latte, people have no sense of self control when it comes to their money.
They whip out their credit card, take the item home and then figure out how to pay for it later.
This type of mindset about money will lead you to financial ruin in no time flat.
Of course, these are all generalizations. There are people out there that make savings goals for big purchases and budget for impulse purchases.
I’m one of them and I’m sad to say that it is very clear that I’m in the minority in this country.
However, it doesn’t have to be that way. You can be the change. You can be financially responsible, unlike the majority of the United States!
Are You Like Most Americans?
If your behavior is like the majority of Americans today, that’s perfectly fine because it is likely that no one taught you anything different. Today that changes.
Consumer debt is not okay. Impulsive purchases are not okay if you haven’t set aside money for those purchases. Consumer debt (credit card debt, car loans, personal loans, etc) is the result of not having enough money to pay for whatever you’ve purchased.
Consumer debt is using dollars you will earn in the future to pay for current expenses.
Consumer Debt Is Not An Option
Consumer debt wouldn’t be a problem, except the companies that loan you the money charge you interest. In some cases, you can pay 30% or more a year in interest because you don’t have the money to pay for your expenses today.
Most people think nothing of it, because they think everyone else has consumer debt just like they do. News flash, not everyone has consumer debt and you don’t have to either.
You can pay off your consumer debt and never pay a dime in interest on consumer debt again. Living without consumer debt isn’t an easy path, but it is totally worth it.
The Key To No Consumer Debt – Delayed Gratification
The key difference between people with consumer debt and those without, everything else being equal, is that the person with no consumer debt has mastered delayed gratification while the person with consumer debt has not.
What is delayed gratification? The ability to wait 15 minutes to get two marshmallows instead of one marshmallow is delayed gratification.
The ability to wait to buy something after you’ve saved for the item, rather than impulsively purchasing something as soon as you realize you want it, is delayed gratification.
The ability to invest money today to have money when you retire is delayed gratification. The real question is, how do you learn delayed gratification?
Learning Delayed Gratification Isn’t Easy
Delayed gratification is a very difficult concept to learn and even I have issues practicing it at times, but it is well worth learning. A few tips that you can use to help you learn the practice as it relates to your money include:
- Write a list of goals you have for your money and put them somewhere you’ll see them daily. Better yet, announce your goals to someone close to you that can help to keep you accountable.
- Ask yourself before every purchase “Is this a want or is this a need?” If it is a want, put the item back and wait at least 24 hours before purchasing it. Increase the time period for larger dollar purchases.
- Talk to someone two decades older than you and ask them what they wish they had done differently with their money when they were your age. Chances are, they’ll share things you never even thought about.
Every person is different, so you need to find what works for you.
Whether it is thinking about the future of your kids or your future self in retirement, if you don’t delay gratification and learn to stay out of consumer debt and actually save or invest for your future, you’re harming your future self and future family.
Don’t be that person. Don’t hurt yourself and those around you. Get out of debt, save and invest for your future.
Do you believe delayed gratification is the key to financial success? Explain your stance in the comments section below!
Lance Cothern, CPA holds a CPA license in Indiana. He’s a personal finance, debt and credit expert that writes professionally for top-tier publications including U.S. News & World Report, Forbes, Investopedia, Credit Karma, Business Insider and more.
Additionally, his expertise has been featured on Yahoo, MSN, USA Today, Reader’s Digest, The Huffington Post, Fast Company, Kiplinger, Reuters, CNBC and more.
Lance is the founder of Money Manifesto. He started writing about money and helping people solve their financial problems in 2012. You can read more about him and find links to his other work and media mentions here.