Scrolling through social media offers endless opportunity to feel the need to make impulse purchases on items you think you need, in order to keep up with people you don’t know.
That’s kind of crazy, isn’t it?
Yet, we still fall prey to impromptu, expensive purchases. Doing so frequently can spell disaster…
It’s natural to want nice things, but nice things require money, and money is acquired through a significant contribution of your time and effort.
The real question becomes, is what you are purchasing bringing value to your life? If the answer is yes, and you can truly afford it, it may be worth it. If the answer is yes, but you know that in order to complete the purchase you will likely need to take on a big loan, use a payment plan, or wipe out your savings…perhaps the purchase can wait?
The ability to delay gratification is a powerful display of maturity.
Delayed gratification is not a new concept. It has been cited by numerous personal development and financial leaders as a way of growing more content, and of accumulating wealth rather than diminishing it. It demonstrates that someone has the capacity to put off in the short-term, in order to gain in the long-term.
Who knows, after saving up that hard-earned money you may find that the item that once seemed like a must-have, is no longer critical to happiness.
No matter the decision, one result is certain. The item will bring you stress if you compromise yourself financially in order to get it.
Where’s the joy in that?
Very true for those who want to live within a tight budget for most of their professional careers and downsize when it’s time to retire, but when purchasing an asset, isn’t it important to see the time value of money? That mistakes today in building wealth will be overwhelmingly washed away by the assets that end up flourishing in the long-term.
As a concrete example, in real estate, when looking to purchase a home in a market with a history of strong appreciation, “waiting” to save enough money for a down payment could knock you out of the homeownership experience altogether. Whereas had you stretched, you would have been able to control an asset whose appreciation would have launched your net worth beyond what those savings could have done for you in the short-term.
Hi John,
Thanks for the comment. I agree, context in this regard is important. It is admittedly difficult to cover all scenarios through one blog post, but the general premise applies. This was more-so intended to address whimsical or wreck-less spending habits. The real estate example is a strong point. If I can purchase an asset (and I am in a good financial position, all things considered) that will appreciate quickly, the costs to me in servicing the mortgage, taxes, PMI etc. are more than likely worth it.