Have you ever heard of the Stanford Marshmallow Study?
Back in 1972, a Stanford Professor by the name of Walter Mischel gave 4 /5-year-old children one marshmallow.
He then would tell the kids he was leaving the room and upon his return, if the marshmallow was still there he would reward them with a second.
In essence, the children had two options:
- East the marshmallow while he was gone
- Sit there and wait until he returned, and they would get a second marshmallow
The video footage is apparently quite entertaining, but the real results of the study came in the subsequent years as the researches tracked each kid's progress in life for over 40 years (You can read more about the study here) and what researchers found was interesting…
Time and time again, the group that could patiently wait it out for the second marshmallow was consistently more successful in life. Whether it was education or health, higher SAT scores or lower obesity rates, better social skills or better relationships, those who could refrain consistently outranked their inpatient counterparts.
In other words…delayed gratification is essential in life. But how do you correctly go about delaying your gratification?
Why is Delaying Gratification important?
Why would someone want to know how to delay your gratification, especially as it pertains to your finances?
Specifically, when it comes to your finances, here is what most banks, lenders and financial experts won't/don't tell you:
The practice of delaying gratification is “The Secret Solution” to most money problems.
Their job is not to tell you to adjust your lifestyle (delay gratification). However, if you read the Millionaire Next Door, the reoccurring theme over and over again throughout the book is to live below your means and delay your gratification.
Basically, if you want one marshmallow now, chances are it might be hard to sometimes find two later when it comes to money.
So whether you are paying off student loan debt, or looking to save up for your first home, getting in the habit of delaying the good for the great is an important habit… but how do you even start?
And if delaying gratification is the secret ingredient for financial prosperity, why don't more people do it?
Because delaying gratification is a simple concept, but it is not always simple to implement.
Delaying gratification can be challenging.
With so many choices and the fact, our prefrontal cortex is constantly making decisions for us, delaying gratification is not always easy – in fact, it's quite challenging.
In order to delay your gratification, we must constantly remind ourselves to avoid immediate gratification and avoid our bad habits we must break. Over and over again we must:
- Fight our own urges
- Exhibit patience
- Fighting our own egos
- Say no to impulsivity
- Resist temptation
- Say yes to our own will power
However, this seems to happen all too often:
You bring your lunch to work with full intentions of eating better and saving a few bucks. At 11:30 someone says they are planning on running to Chik-Fil-A to grab lunch and asks if you want anything.
The idea of eating a chicken sandwich with warm waffle fries and a cold coke sounds so much better than the banana and nutrition bar you have in your lunch bag.
Right then and there we are faced with the ultimate choice:
- Do we go with our packed lunch, eat healthier and save a few dollars?
- Or do we eat fast food, I mean who doesn’t love a #1 from Chik-Fil-A?
Each day it is estimated we are faced with and/or make about 35,000 small choices. Sometimes they have big impacts, sometimes smaller – but they all add up. When it pertains to delaying gratification, it is really easy to justify our choices either way:
“I haven’t ate there in forever,” or “I deserve a good lunch for my hard work today,”
>> See How Delaying Looks Here: 10 Sacrifices We Made to Pay Off $150,000 in Student Loans
The long term choice is obvious – save your money, save your health, eat the lunch you packed.
The short term choice (Which is always more tempting) – don’t worry about the money, you can run it off later, and just eat your lunch tomorrow.
While the lunch example is trivial, believe it or not we are bombarded by these types of scenarios multiple times a day. For example:
- Should I buy that new car or keep my old one?
- Should I put my tax return towards debt or go get a new TV?
- Should I save money this weekend or go out?
- Should I get up early and workout or just wait until later?
- Should I eat 1 marshmallow on my ice cream or 20?
Each scenario, silly as they may seem, are a classic example of the small choices we make daily. Some are conscious, others are subconscious, but either way, we are either delaying gratification daily… or we aren't.
Since delayed gratification boils down to choice, what does it look like?
Delaying Gratification 101 = Habits.
For many, delaying gratification and putting things on hold is a tricky subject.
A common myth is that we as humans simply lack self-discipline. But self-discipline is simply a habit, a habit we have formed or not formed. We don't lack self-discipline, we just don't bring enough attention to self-regulation!
In other words to get better at delaying gratification, we first must create awareness about the desired behavior we want!
At times we think we're aware of the choices we make, but in reality, we are not. Most of the time we are operating on autopilot. Thus, understanding how delaying gratification works is the first step we all must take.
And that starts with your daily habits – the subconscious and conscious choices we make every second of every minute of every day.
Addressing some of your core habits will help you start delaying your gratification! James Clear has a phenomenal read, Atomic Habits, that focuses in on the smallest of our habits.
Daily actionable habits extended over a period of time add up.
Sticking to your habits is important. You don't see the gym and eating change results until month three. Saving $100 a month doesn't seem like much until month ten when you have $1,000 saved.
We Choose to Delay
Staying off your phone and avoiding time wasters doesn't seem like a big deal until you look back and see all the time you freed up simply deleting a few social media apps!
Saying no to temptations and urges isn't super challenging, but it is just as easy to say yes. Just like how the young preschoolers were not facing a huge problem – choose 1 marshmallow or delay, and get 2 marshmallows.
Start of Happiness explains delayed gratification this way;
Simply, it means making a choice which limits the ability of getting something now, for the pleasure of being able to have something bigger or better later.
Like the studies done on little kids, do they choose 1 marshmallow now or 2 later, there is technically no wrong answer. The only judge of our behaviors in most cases is ourselves.
In many cases, just being aware is enough to get us over the hump. Bringing awareness to things like our overspending, or to our eating habits helps eliminate instant gratification.
Achieving our personal finance goals is no different. Goals like becoming debt-free or just saving more money all hinge on the basis of delayed gratification
According to Psychology Today, the ability to delay gratification—that is, impulse control—may be one of the most important skills to learn to have a satisfying and successful life.
Money Skills are Impulse Control Skills
Ever walk into Costco to get some groceries and walk out with some gloves, a new blender, 78 pounds of some food you’ll never finish, and a bucket of vitamins?
Yeah… me too.
It has happened to all of us. From taking your car to get fixed and coming home with a brand a new truck, to putting things on credit just because we want the here and now.
The constant bombardment of consumerism, auto ships, 1-day delivery, credit access, and even student loans make it really simple to buy now, pay later.
However, as much as consumerism has a correlation with delayed gratification, believe it or not, or primitive genetic makeup has a huge effect as well.
The basic chemicals our body creates in order to get us to do things actually make us better or worse at delaying the good. Dopamine – the get-up and go chemical – is released when we get short term rewards.
A new car, a night out, a good meal = dopamine release.
The potential problem?
The more you reward the dopamine fueled activity or instant gratification habits, the harder it is to access long term happiness and develop delayed gratification habits.
Money Skills are Delayed Gratification Skills!
Call it self discipline, impulse control, or just spending less and saving more, the more you delay on the good the better the long term results are!
So here are some ideas and tips to help you better delay your gratification when it comes to money!
How to Delay Your Gratification in 6 Steps
1. Have a plan.
For starters, in order to effectively delay your gratification for something better you need a plan. Self-control is a skill you sharpen. However, all activity requires a map.
Whether you are delaying gratification for financial gains or long term health, develop a plan. For example, if you are looking to pay off student loan debt, start with these ways to cut the monthly expenses.
Maybe you reduce the number of times you eat out to 1x a month. Or cut the cable. Or eliminate sodas. The small changes will end up turning into big results.
To start, just write why you are delaying. Then come up with a few steps to help you get there.
2. Focus on another reward.
Sometimes the challenge with delayed gratification is the loss of the immediate reward.
We work hard, we get paid, and we want something. And 9 times out of 10 we can convince ourselves we deserve something.
So it is easy to go buy something, eat something, or do something that may not align with your plan for delaying your gratification.
In order to combat instant gratification thinking, in addition to thinking long-term, focus on a new reward.
Maybe you don’t go on a vacation for the next 3 years and focus on paying off your student loans, but once they are paid off you go on 6 vacations in one year!
Would you choose 6 vacations in 1 year… or 1 vacation each year for 3 years?
Write down long term rewards with your plan
3. Use cash.
Simple ways to eliminate costs like eating out and general overspending is to use cash as much as possible.
One reason consumer debt is steadily increasing because of the physiological component of plastic vs cash.
Research has been linked to higher spending when perks of credit cards are used instead of cash. Simply put, cash is king, and when it is in your pocket you are more reluctant to let go of it.
Note: Using a cash system will also keep you in line with your plan and long term rewards! It has been shown adults spend 12-18% more money when they use plastic instead of cash!
4. Know WHY you are delaying.
Similar to having a plan, know WHY you want to become debt free.
Those who know why always figure out how to do something. Maybe debt freedom means you can stay at home with your kids or take more trips. Maybe it means you can retire early.
It will be easier to display “Cognitive Control” which is the process by which goals or plans influence behavior if we know WHY. Also called executive control, this process can inhibit automatic responses and influence working memory.
Whatever delaying means to you, just know WHY.
5. Stop thinking in present value.
In order to help with delayed gratification as it pertains to personal finance, stop thinking in present value.
Present value is thinking as if something will not change in value either positively or negatively.
A classic example of present value is the idea that a new car is worth what you paid for it. You are mistaken – if you got in a wreck the next day you would get 11-20% less than what you paid for it.
Five years later, that same vehicle is worth an average of 60% less.
On the other hand, $5 a day in an account with a 4% return for a 35 years is an extra $147,000. You choosing the Starbucks or the $147,000?
6. Realize delaying your gratification is worth it.
The biggest tip if you are trying to delay gratification is this:
Recognize that delaying the good for the great is always worth it!
Paying off your car, getting out of consumer debt, or losing some weight are all the results of delaying something good, in order to get something great.
Imagine how you will feel when you are debt free or you have reached your health goals. I can tell you that even though we are nowhere near our financial goals, just being consumer and auto debt free is an awesome feeling.
The sense of security just knowing the only payment you have besides a mortgage and utilities are student loans gives you more peace of mind.
My take on Delayed Gratification:
Seriously, delaying whether it be big or small, will always work! The reason delaying gratification always works – because you control what you do.
Talk to someone 20 years older than you and ask them what is important, you will be surprised. People who delay the good for the great develop habits of discipline that can result in longer-term happiness. Thinking long term teaches us how to not get so caught up in the here and now, but think for long term gain!
There isn't a shortage of information available when it comes to reaching personal finance goals. I think the missing ingredient – more often than not – is delayed gratification. Fulfillment comes from accomplishment.
Not giving into our short term desires and saying no to immediate rewards won't be easy, but putting distractions on hold is worth it in the long run.
Once I was able to grasp this concept (I am still growing in many regards to delaying gratification), I was able to start checking off long term goals!
I hope you enjoyed and please share with someone who might benefit from some delayed gratification!
Q: What is something you are currently delaying your gratification for?
Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $300,000 in student loans with his wife in less than five years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post, and more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their chocolate lab named Morgan, working out, being outside, traveling, and helping others with their finances! I got serious with money when I used Personal Capital to track my finances.