Delayed Gratification

“Gratification is the pleasurable emotional reaction of happiness in response to fulfilment of a desire or goal. It is also identified as a response stemming from the fulfilment of social needs such as affiliation, socializing, social approval, and mutual recognition.”

If you know me well, you’ll know how much I love(d) Instant Gratification. I would classify my “Wants” as “Needs”. The first opportunity I would get at fulfilling any desire, I would jump right at it. Buying that 10th pair of denims or that 21st pair of shoes, without thinking twice, made me “happy”. I felt the need to satisfy my Want immediately.

But then, why am I making it sound as if it is a bad thing and why did I say I “love(d)” it, rather than “love it”?

Driving by your favourite pastry shop, did you drop in to savour that delicious truffle cake? Did you check in at the mall and end up with a boot full of bags? Did you swipe your card mercilessly on that Italian retreat?

How long did the “happiness” last after having given in to these pleasures without a thought?

We often battle with similar choices every day, and these decisions often boil down to choosing between short-term satisfactions or having the patience to wait for long-term benefits.

Humans are hardwired for instant gratification. Whether it is a latest gadget or that indulgent cheesecake, we want it all right now.

Daniel Kahneman suggests that, as humans, weakness in decision-making often occurs because we are more emotional than numerate. The decision-making process is fairly simple. You recognize a need (I’m hungry), look for possible ways to satisfy it (sandwich/butter chicken/salad), evaluate these alternatives (calories/taste), make the decision (steak with salad) and afterwards reflect on your choice (definitely worth it/shouldn’t have eaten that much).

Unfortunately, emotions are short-lived and fleeting. What felt good five minutes ago could now be a source of regret.

It’s rather painful to resist the temptation in that moment. However, sacrificing immediate pleasure for a larger reward in the future brings more satisfaction, peace of mind and a sense of accomplishment.

Can you imagine what it would mean to forgo buying the latest iPhone?₹60,000 saved at an annual return of 7% would be worth ₹84,000 after 5 years.

Do you now feel the pinch for making the yearly upgrades to your gadgets without an actual need to do so?

Being able to delay gratification is a skill that must be acquired on your road to wealth.  If you never inculcate this skill, then you will never be able to accumulate wealth.  To become wealthy, it is integral that our resources exceed our needs. Without control over our desires, our needs will exceed our resources. By delaying gratification, we tend to take a step back, reflect, and consider the future aspects of our decisions and their consequences over time.

Can you learn this skill now or is it too late?

Well, it’s never too late to learn.

Let us look at how we can incorporate this to achieve success in our financial journey.

  • Set and Track GoalsWhat isn’t measured, isn’t managed and I can’t emphasise the importance of this enough. Write down your money goals. This gives you an insight into your future needs. Track the movement of every rupee and maintain a budget. This will help you focus on the bigger targets and control your impulse purchases.
  • Be Patient – Just as in the famous “Marshmallow Experiment” the kids were rewarded with an extra marshmallow for delaying the consumption of the first, reward yourself after completing an activity or a task. It prevents you from instantly treating yourself and helps you inculcate a habit of waiting for the prize after completion of the task.

As a kid, dad would reward us for scoring a certain % in our exams, with the things that we wanted like a new doll house or a PlayStation or even a Tennis Racket. We would never be rewarded without actually working hard and having earned them. This way we valued the items more because we had worked for them.

  • Challenge yourself to “No shopping Days” or “30/60/90 Shopping Free Days” – This is something that has worked really well for me. My profession requires me to visit a shopping mall every single day. The temptations are enormous. How do I battle it out? I challenge myself. I give myself a challenge to go without shopping for a certain number of days a few times a year. This benefits me two-fold. The first and most obvious is that I end up saving a ton of money by not falling prey to Impulse Shopping. Secondly, when I actually allow myself to shop, I enjoy and respect that process thoroughly. The whole experience is more mindful and hence financially lighter on my wallet.
  • Apply the 10-10-10 Rule –  This rule is fairly simple and effective in decision-making. All you need to do is ask yourself: How will I feel about this in Ten Minutes, Ten Months, and Ten Years from now? What’s special about these three timeframes is that they let you assess your decision from three different viewpoints. They give you a very balanced, comprehensive and realistic overview of how your choice will play out. Next time you’re thinking of upgrading your car without a real need, think about its impact based on the above timelines.

Living in the moment can feel great. But in order to create true great moments, you have to think long term and make smart decisions. The security and peace of mind that delayed gratification brings are well worth the effort.

Did you know?

Many studies have shown that those who accumulate wealth tend to be more frugal and live less opulent lifestyles than their peers even though they can afford it.  Therefore, delaying gratification is integral to financial success and a habit everyone should try to incorporate in their lives.

Fun Fact:

Warren Buffet still lives in the same house that he bought in 1958, 60 years ago.

Give that a thought!

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