What is the main reason why you always run out of cash? In case you blamed the high living costs or limited job opportunities in Singapore, you are only partially right. What are the other factors contribute to running out of cash? The answer is a very strong urge for instant gratification.
This is the reason as to why, despite the sums of cash you make, you remain broke still. Below are some ways you can fight with instant gratification:
1. Paying much for irrelevant speed
Instant gratification implies having what you need, right N-O-W. That pushes you to a pay for a premium on speed, without any logical reason.
In case you do online shopping, for instance, you might be familiar with the options for express shipping. This is the instance you might be required to pay a heftier fee for shipping purposes; in some occasions it can be up to S$40, so as to have “next day delivery”, or a week sooner. Express shipping is essential for the tight situations (for instance when one forgets their friend’s wedding & is wants his gift to be delivered as fast as possible). However, instant gratification may push you to utilize it even for those instances when it is not needed.
Does it actually matter whether the purchase arrives in 2 weeks rather than tomorrow? Often, the sole reason it should is simply because you need instant gratification. This might similarly be the case in good, old-fashioned brick & mortar shopping. Take an example where a shop sells its outfit for S$35, however, it is only going to be in stock after a few days. A shop that is one floor up sells the same outfit for S$50, but now they have it in stock.
Logic simply dictates that, preventing some kind of an urgent need (for example: having a date tonight), you are supposed to wait for some days in order to get better deals. Instant gratification however may force you to purchase the outfit at a higher price, for the single reason that you could not wait.
2. Purchasing on credit even when it is not needed
Suppose you need to purchase a new personal computer. You might set aside S$500 every month for a period of 3 months, or you might purchase it right away by obtaining a personal loan from Licensed MoneyLender. Now in case the laptop was crucial for work, it could be reasonable. But if you just wanted to surf the internet or watch Netflix, it isn’t worth to pay that rate of interest on your personal loan for the simple reason that you want to acquire it instantly.
There are so many purchases which can wait, in case we observe things from a much reasoned view. It is the desire for instant gratification which pushes us into debt, by making us to purchase on the spot.
3. Buying more as compared to what you can utilize
Instant gratification forces you to horde things for “future”, even when you have no reason for it. One side-effect for that is purchasing much than you can utilize.
For instance, assume that you have bought a brand new cookbook & you become excited to attempt out some recipes. Instant gratification might force you to purchase ingredients worth S$300 at the wholesale shop, for all these recipes. It sounds good & “complete”. However you are going to purchase much than you can utilize. It is impossible to prepare all the dishes in your cookbook at a go; it is going to take you several months to entirely get through all these recipes. That implies that there is no need of spending S$300 all at once; you could control your money better by simply purchasing ingredients when you require them.
This is a similar thing with hobbies such as reading; instant gratification forces you to feel good when purchasing these things instantly, even when you are purchasing more than what you spend in 2 or 3 years.
4. Making partially-conscious purchases
Instant gratification pushes you to act quickly. In some cases the hands move & the wallet is open even before you notice that you are actually spending. This similarly takes place in the diet struggles – it is the idea where you find yourself looking at your potato chip bag’s bottom, even when you just intended to consume not more than two pieces.
This kind of spending happens at the supermarket’s paying counter (this is the reason as to why cheaper items, such as mints & snack bars, are always placed there). You might similarly end up making some side-purchases, & not actually thinking about the cost, while shopping online. This might happen once you take a look at the “people who purchased this also purchased…” category.
5. Poorly-timed selling
Instant gratification not only causes wrong purchases but also wrong sales.
One main example is when you sell stock during the wrong time. Assume that you have a seven years investment at Straits Time Index Fund, & during a certain good year the values of the share get high. Instant gratification might make you to become tempted and end up selling the stock & indulge in the cash right away, even when it would be better waiting for it for retirement purposes.
In case you need cash to purchase some expensive luxury (for example: you want to buy a good watch instantly), it may tempt you to “hock” your stuff or even selling items on Ebay in order to accumulate funds. In the rush to accumulate money, you might be selling some valuable products at lower prices, to acquire the cash fast.
This has no sense, since you will be purchasing high & selling low. Remember that selling what you have in order to receive a quick buck might amount to very serious financial losses.
How do you control instant gratification
The good thing is that one can develop self-control. This is why you are not that impulsive currently, as compared to your childhood days. Most disciplined savers didn’t begin that way; research has it that just 25% of participants can stand instant gratification.
However, one can slowly develop self-control by simply establishing & following systems. For instance, one can lay a rule that they are going to purchase a new item only when they have completely utilized something related.
One could, for example, set a rule where they can purchase a brand new video game after completing a previous game.
In your endeavors to implement & follow systems, you are going to observe that your self-control is improving.
The other means to develop self-control are basically resting well & eating well. Your urge for instant gratification is attributed with stress & exhaustion, since your mental resilience is going to fade away. By making sure that you get enough sleep & remain healthy, you are going to control yourself better.