Here's Why You Should Buy Into the Idea of ‘Delayed Gratification’

Aug 18, 2021

Listen to Here's Why You Should Buy Into the Idea of ‘Delayed Gratification’

00:00 00:00

Last weekend during the celebration of 75th Independence Day, I met my friend Neha who has started her first job few months ago. We had already discussed earlier why one must start saving and investing since their first paycheque. Neha said, "Mitali, firstly I would thank you for guiding me through and explaining why it is important to start saving since my first paycheque. It really helped me."

She added further, "You know, now I am financially disciplined and from past five months I have been saving a certain portion aside and investing regularly through SIPs. As we discussed I have set certain financial goals and investing accordingly to achieve those envisioned financial goals.''

To which I responded, "That's great! I am glad to hear that our discussion helped you to attain financial discipline. After all it's a good habit to save and invest as early as possible to start with your journey of wealth creation and be prepared for unforeseeable events such as the pandemic."

Neha replied, "Yes, I agree and I have maintained an emergency fund towards which I save a certain amount every month. While I was in college I had the 'you only live once' kind of approach to money, but now I have realised that saving my hard-earned money and investing it wisely can help me be financially secured and achieve my financial goals."

"Now I am planning to buy a new iPhone. My old iPhone works properly but now if I have some savings why not upgrade the phone to the latest model. What do you suggest...? can I add up the amount saved through these five months and borrow the remaining amount with EMI option and buy the iPhone worth Rs 1 lac... does it sound like a good plan?"

I replied, "Neha, I will not suggest such impulsive purchase of new phone when there is no immediate requirement. You should consider saving for the desired phone and postponed the purchase for few more months. Avoid taking a loan with EMI, or else it will create an unnecessary debt for you."

"You are well verse with the idea of investing early to build a financially secure future, but now you need to be aware with the concept of delayed gratification as well. This will assist you to prevent any debt burden and splurging that may affect your financial well-being."

Neha asked curiously, "What is this delayed gratification? How does that work?"

Delayed Gratification
(Image source:

Most millennials spend on non-essential commodities, as there is a desire to live a lifestyle beyond one's means in order to keep up with the peers or the ongoing trends. In the above-mentioned case, Neha is willing to buy the latest iPhone, that too on EMI. This will create a debt for her and she will end up paying more amount including the interest.

If you spend recklessly and keep borrowing to fulfil your immediate needs, it will leave you with insufficient financial stability to survive in the times of crisis. Delayed gratification helps you resist such impulsive spending and create an efficient plan to achieve those short-term goals.

Now let me explain what exactly the concept of delayed gratification is...

The ability to delay the impulse for an immediate reward to receive a more favourable reward at a later time is a standard definition of delayed gratification.

Delayed gratification is a muscle you can grow to serve your future selves. Before you make a purchase, ask yourself if it's something you really want or need. In simple words, delayed gratification is putting off what we want now to get something bigger and better later on. For instance, you want to purchase a car but you do not have enough savings for your desired car, so you opt to take a car loan. This will create a debt burden for you. It will take away a portion of your income and leave you with very less to spend and save every month.

With the help of delayed gratification, you can plan to save and invest in worthy avenues for your short-term goal of a desired car and stay out of debt or any financial constraints. You will be constantly challenged by temptations to splurge on non-essential commodities to live up to the trends amongst peers. Knowing how to delay gratification is an effort to serve a more important and more gratifying goal, which makes all the difference in achieving that goal.

"The ability to discipline yourself to delay gratification in the short term to enjoy greater rewards in the long term, is the indispensable prerequisite for success." - Brian Tracy

Delayed gratification is the ability to resist the temptation of instant pleasure and there are several benefits attached:

  • It enables you to postpone your current pleasure and work towards achieving the goal. This builds a level of patience and financial discipline in you.

  • It prevents you from splurging to achieve instant gratification. Impulsive spending can affect your financial health and create financial instability in future.

  • Delayed gratification is not an easy skill to acquire, but it helps you manage your impulses to result with better rewards in future.

  • It will enhance your self-control and ultimately assist you in achieving your long-term goals well in time, which even improves your self-worth.

Delayed gratification may not feel like a sacrifice because you know it can help you achieve your envisioned long-term financial goals and provide with incredible peace of mind. Currently, it is crucial to be in pink of your financial health, amidst the uncertainties of COVID-19 pandemic. You do not want to create any unnecessary debt burden by making impulsive purchases and suffer in times of crisis.

Consequently, exercising delayed gratification can help you take control of many aspects in your life, mainly your finances. Delayed gratification helps you save money. As you hold off on an immediate purchase, the delay offers you time to save enough and avoid borrowing which cost interest fees and other charges.

Delayed gratification helps you maintain a better credit score by preventing debt creation for unnecessary wants. It helps you have a better opportunity to borrow when you actually have the need such as a home loan. It also influences you to question your spending and make worthy financial decisions.

As a result, to enhance your financial well-being, it is essential to make informed financial decisions, which involve effective financial planning and understanding of delayed gratification. However, lack of financial knowledge may create a hurdle, so you must be equipped with financial literacy to have better control over your finances. You should evolve as a Financial Guardian to take key financial decisions in order to achieve your financial goals.

According to Mr Warren Buffet, you should not go overboard with the idea of delayed gratification. While answering a 17 year-old on delayed gratification Mr Buffet said, "You don't save by not going to a movie. There is a lot to be said about saving money by denying yourself enjoyment. Delayed gratification is not necessarily an all-qualified reason."

Delayed gratification plays an important role but you need to be aware of when you should implement it and when it's the time to spend. It is not necessary to cut off your happiness with regular monthly expenses to practise delayed gratification. Rather, it is necessary to restrain your impulsive splurge on large expensive purchases or borrowings. It's not worth to forgo a two-day trip with family now, hoping to save enough for long international vacation later.

Therefore, you must empower yourself with financial knowledge in order to comprehend the above-mentioned features of delayed gratification, which is an important part of the financial planning process and helps you accomplish your long-term goals in life.

PS: PersonalFN understands that not everyone holds adequate financial knowledge. We encourage you to gain and enhance your financial knowledge and become a 'Financial Guardian'. You should understand the financial planning elements to become your own financial planner and guide your family through these challenging times.

And in case you are wondering how to become that financial guardian for your family, PersonalFN's latest special initiative, the "Certified Family Guardian" offers you an exclusive opportunity to learn the finer nuances of money management.

Organised into eight modules with 24 extensive videos, the "Certified Family Guardian" will help you with all the relevant tools and learning modules needed to get better at money management. It also offers a host of other benefits to help you make informed investment decisions. Read here for complete details.

So, if you wish to improve your financial knowledge and understand why you should buy into the idea of delayed gratification, enrol to "Certified Family Guardian" course today!

Frequently Asked Questions (FAQs)

1. What is delayed gratification?

Delayed gratification is an act of resisting an impulse to take an immediately available reward in the hope of obtaining a more value and gratifying reward in the future.

2. Why is delayed gratification important for an individual?

It is crucial for an individual to adopt the idea of delayed gratification, as it prevents you from splurging to achieve instant gratification. It builds a level of patience and financial discipline in you.

3. How can delayed gratification improve one's financial well-being?

Impulsive spending can affect your financial health and create financial instability in future. Delayed gratification enhance your self-control, saves you money, helps you to maintain a better credit score and make informed financial decisions.


Warm Regards,
Mitali Dhoke
Jr. Research Analyst


Join Now: PersonalFN is now on Telegram. Join FREE Today to get ‘Daily Wealth Letter’ and Exclusive Updates on Mutual Funds

Add Comments