When it comes right down to it, what is the true key to financial success?
You could argue that the key is getting enough marketable skills to be able to earn a decent income.
Or that the key is to consistently track your monthly spending in a budget spreadsheet. Or you could even argue the key is to learn the ins and outs of investing.
But really, while all of these things are very important to your long-term financial health, each of them is based on upon one particular characteristic: the ability to delay gratification.
Above all else, I would argue that it’s the art to delayed gratification that is the true key to financial success.
While many external factors can cause financial hardship, one of the common internal factors that can result in financial difficulty is an inability to appreciate delayed gratification. If you’re buried under debt, struggling to pay your car loan, or even having trouble paying your mortgage, then it’s possible you might benefit from a different perspective on long-term goals.
So what is the art of delayed gratification, and how can you obtain (or enhance) it yourself? Let’s explore this in depth:
1. What We Learn As Kids Shapes Our Perspective
As it turns out, our ideas about money, like so many other aspects of our personality, often come from childhood. The wide diversity of people out there, and their wide range of living styles, means it’s no surprise that there are many different ways of looking at money.
Along the “spectrum of gratification” some of us are too accustomed to instant gratification and others (albeit fewer of us) are too accustomed to delayed gratification. If you fall in the latter category, then your goal may be to learn to enjoy things in the moment more (a subject for another post).
On the other hand, if you realize that your early life experiences made you more comfortable with instant gratification, then you have a challenge: how to shift from what you’re used to toward a mentality that values long-term thinking and long-term goals. To truly achieve (at least in some parts of your life) the delay of gratification. This is not easy. But it’s doable, and the tips below will help you do it.
2. What We Value Is What We Work For (and Vice Versa)
It’s always been true that the things we value are the ones we end up working for. If you value professional accomplishment, you will work hard to make your career a success. If you value the respect and admiration of your peers, you will work hard to win their approval. And if you value camaraderie, you will work to develop friendships with those around you.
For those who value short-term gratification and have trouble with finances, it is therefore necessary to change your value system itself. The process begins by consciously examining your high-level values, but you also must get more detailed and look at how your values are expressed on a daily basis.
For example, if you go shopping every weekend or frequently treat yourself with dinners at nice restaurants, it will be necessary to look at the why behind those actions. Is it an attempt to reward yourself after a hard week of work? Is it your way to impressing your peers?
Once you understand the reasons and the values behind your current actions, see if you can consciously begin to shift your values to a more long-term view.
3. Imagination Supports Delayed Gratification
In order to shift your mindset, one of the most powerful tools in your arsenal will be your imagination. That’s because long-term rewards are – by definition – not right in front of you. Rather, you can only see and feel them insofar as you can picture them in your mind and create a realistic expectation of grasping them one day.
And the funny thing is, you can actually practice using your imagination in this way.
When you are about to drive to a restaurant for dinner, stop and begin to imagine your long-term goal. It may be having your student loans paid off. It may be having enough money to retire early thanks to setting money aside in a Roth IRA when you were younger. Whatever it is, imagine it as fully as you possibly can – enjoy each detail of this future reward as it’s projected in your mind. Then, decide to stay home and make dinner using food in your kitchen rather than eating at the restaurant.
With a little practice, you will start getting the same rush of endorphins by imagining your future rewards as you are accustomed to getting from instant gratification.
4. How to Make Future Rewards Feel More Concrete
To make your imagination even more powerful, why not use a few psychological tricks? Let’s say your goal is to own a home one day, but you’re having trouble saving up for the down payment. Here’s what you could do: Create a collage by putting pictures of homes from magazines on a piece of paper or cardboard. Place it somewhere in your home where you will see it every day.
At the same time, take an old jar and write a big label for it that says “New Home Fund.” Whenever you make a decision in your daily life that saves money for your long-term goal, you can put the money in the jar (and deposit it in your bank account during your next trip to the bank).
If you use one of the great online checking accounts and/or have a smartphone, this may be even easier because you can make the deposit digitally and immediately. Either way, this habit will make your long-term goal feel more concrete, and you’ll be more motivated to stick with it.
Anybody can master the art of delayed gratification – no matter what your current relationship with money may be. Hopefully the tips above will help you, and feel free to post a comment below if you have specific questions about how this can help you.