Instant Gratification versus Delayed Gratification
Back in early January I attended an event with B bank where they launched their B-tox challenge. I wrote about this challenge here with some simple changes you might want to make to reduce your monthly spend and maybe start saving or paying a bigger chunk of your debt repayment.
There was a fascinating panel discussion about money, making savings and one point that really struck me was the concept of instant or delayed gratification. One of the panel members was psychologist Linda Papadopoulos and referring to what we were teaching our children about the mindset of instant or delayed gratification and it got me thinking about how I live my life, how I have learnt about this concept and how I am passing on these key messages to my children.
It’s not something I have ever thought about a lot before, but it does make a lot of sense when I look at my attitude to money thus far in life!
I grew up living with my parents. My siblings were both 20 years older than me and had long before moved out. I am told my mum thought of me as a surprise gift as I was born when she was 42, this did lead to special treatment that my brother and sister didn’t have when they grew up. At that point in life my parents had more money and were settled in nice house in Penzance, Cornwall. I wanted for nothing. I was never spoilt, but if I wanted things I generally got them. Christmas and birthdays were generous times with gifts like the Cindy house, the commodore 64 computer, a mountain bike or even a car when I passed my driving test.
When I wanted things, they were given to me. I didn’t have to wait or do chores. I was learning a behaviour growing up that if I wanted something it would be given to me in that moment.
Life Changes drastically
But then within a three-year period life changed significantly. By the age of 19 both of my parents had died, and I was thrown into a space of insecurity, depression and uncertainty. I was at school and university when this happened, so not quite in the adult world. But part of the reaction to my parents dying was wild spending sprees as soon as the grant cheque was cashed. I signed up to store cards as soon as I could at the age of 18 and loved the idea of getting a haul of Topshop clothes before I had to pay for it. I remember going out in my first year and buying myself a fancy 5 CD player stereo for £300, do you remember those huge beasts? £300 was probably half of my terms grant cheque.
I was forced into an adult life from a young age and wasn’t taught any sort of money management theory. I learnt it myself. And what I learnt was that if I wanted something why save up for months or years even when you can take out credit to have that thing now. Instant gratification.
A Personal situation dictates a lifestyle choice.
My personal situation drove some very targeted behaviour after finishing university. I worked hard and ensured that I chose a well-paid profession after I left university. I earned a good salary working for a bank and studied to become an accountant. The financial aim was always there from the beginning. I wanted a high paying job meaning I could live whatever life I wanted, and that secure higher salary was necessary as I had no one else to fall back on. The purchase of things continued rather than saving up. I always had that thought that my salary would always repay the credit cards.
But a situation can change
Through choice I left the corporate world in 2015 but I didn’t change my attitude to money quickly enough. My salary had gone from thousands per month to nothing whilst I started up my business. I should have been more careful with my redundancy money, but I wasn’t. We wanted to go on holidays and continue spending on nice clothes, dinners out and stuff. Soon the redundancy money ran out, but we still needed to pay the mortgage and the bills, and the result was a big credit card bill without the income to pay it back.
The past year has taught me to think differently about stuff. That you can wait for things that need to be bought. We got to the point last April where the credit cards added up to 15.5k and the spending had to stop, and a huge cut began. The payback £15,500 mission began. Since then I have learnt that it is entirely possible to live for much less, and I mean hundreds and sometimes thousands less per month. We had to come up with a plan to repay our debt and that process continues. And this process includes not spending on anything big during the year. A big lesson in having to wait for things rather than instant gratification
Teaching delayed gratification to your children
I am now conscious about teaching my children about having to save up for things rather than getting things as soon as they are required. Experiencing the pleasure and satisfaction of saving up for something and then being able to use that money to buy something they wanted is important. I want my children to grow up understanding what being in debt is like, that it is a constant shadow in the background, a tie that the banks have over you. The money always must be paid back. And just imagine the freedom of one less big monthly repayment. I grew up thinking debt was normal and that it was 100% fine to have a 0% credit card with a balance on it, always. But now I am looking forward to that time, the first time ever in my life, when all my debt is repaid.