Make it a habit: Delay gratification
Are you itching to get the latest iPhone? Are you buying it today or are you willing to wait a few more months when its price goes down significantly?
How does delaying gratification help you become financially independent? And until when should you wait?
Delaying gratification is the ability to wait for something. If you’re the type who MUST have the latest gadget, the latest fashion right here and right now, then I can tell that you are likely to have more credit card debts. Why? Because the more you give in to your temptations, the more likely it is that you are prone to swiping that plastic.
Psychoanalysts believe that the ability to delay gratification is a personality trait important for life success. When you can delay gratification, you are able to focus more on the important things and you are not easily swayed by your impulses.
Think about it. When you see a pair of shoes in the mall, do you immediately go inside the store and buy it? Or do you go home first and think about it? Do you immediately think that you are carrying your credit card and you can easily just charge it or do you think that maybe you don’t have enough money yet and you’ll just buy a pair when you already have the cash to pay for it? Do you ask yourself if you need another pair of shoes when you already have several dozen at home or do you tell yourself that you just want to have it just because?
The road to financial discipline and independence depends largely on one’s ability to delay gratification. When you learn to walk away from a strong impulse, you are basically telling yourself that you can buy an item at another time, that you really don’t need to buy it, and that you are in control of your own finances.
But when can you make that purchase? I have two rules of thumb to determine when it’s time for you to buy. 1) When you have enough money to pay for it (without dipping into your savings). 2) You don’t have to charge it to your credit card.
If you find yourself thinking that you can just withdraw money from your savings or you’re thinking of just charging it, trust me on this one, it means you cannot afford it.