Is Instant Gratification Ruining Your Budget?
Who seeks instant gratification? Most people is the answer. Who doesn’t appreciate getting the satisfaction—pleasure—of having a desire fulfilled sooner rather than later? Instant gratification could be ruining your budget.
Instant gratification could be ruining your financial security—your budget
Is Instant Gratification Ruining Your Budget?
Too often we have a narrow concept of instant gratification: We’re out in town, get hungry or thirsty, pull into the first fast food place we see, and in no time we’re driving away with a burger or soda. Instant gratification!
Well, there went a couple of dollars…That’s—probably—a hit your budget can recover from. But what do you do when the newest iPhone or gaming system comes out? Have you saved the hundreds of dollars you need to get one? Or, do you just have to have it now, and later you’ll figure out (???) how to cover the expenses that money was meant for? If you’re in the habit of taking that kind of action, it’s likely you’re ruining your budget. It may take a drastic endeavor to salvage your financial health.
The pursuit of instant gratification can sneak into every facet of life. In some ways, it may seem great, but it might be at the root of a poor financial state. Along with some solutions, I’ve made a list of ways instant gratification ruins budgets.
You Have Credit Card Debt
I know there are times when it’s necessary to use plastic in order to pay for something urgent, such as an emergency when we have no ready funds. That’s not the kind of thing I’m talking about here. I’m referring to people who try to buy a lifestyle they can’t afford. It’s a known fact that you can’t borrow your way to wealth. Trying to is an expression of someone with an instant gratification issue. With credit card interest rates hovering around 20% percent, it doesn’t take long for a credit card bill to consume any disposable income you may have.
If you carry a credit card balance, you need to examine how you are using money you have to pay for in the form of interest. Carrying a credit card balance is a sign of poor spending habits: Rethink them.
Solution: Stop using credit to enhance your lifestyle. Budget and save money to cover both your regular expenses and any extras.
You Have to Ration Your Money at the End of Your Pay Period
Where is your money going? If you have to severely ration your money just before payday comes around, you’re probably overspending at the beginning of your pay period. A spending journal will show you where and when you’re spending your money. You’ll see where you are wasting it. Often, you’ll find you’ve indulged a number of times in instant gratification. Also, develop a budget that will allow you to schedule your regular expenses in a way that maintains your financial stability throughout the pay period.
Spending money and not tracking it is an example of poor spending habits, so is the need to make a lot of major payouts all at the same time. Your money needs to last until more comes in.
Solution: Use a spending journal to help cut waste.
Your Emotions Dictate Your Purchases
The appeal is a great motivation to buy, especially if we’re inclined to immediate gratification. If we like how something looks or feels or because it’s cute, the item often moves onto our “gotta have it now” list. On some level, these things make us feel good and we think owning them will make us feel even better. Essentially, we form an emotional bond.
Rather than emotion, the standard of our purchases should be functionality. And, of course, affordability needs to be a primary concern. What we buy should fulfill a practical need in life. That doesn’t rule out buying something that makes us feel good, but feelings should be peripheral to your purpose for buying it. Don’t buy something just because “it’s so cute.”
Note: I have a hard time with people that go window shopping, go to the mall to hang out, and end up buying stuff. Spend your money wisely.
Making emotional buys is a sign of poor money management (poor spending habits).
Solution: if you can’t resist temptation, leave your credit cards and cash at home. That way, you will at least have to go home to get your form of payment before you spend money. That will also, give you time to reconsider the wisdom of making the purchase.
Too often, people get caught up in this mentally, and when they have overspent, they ask why is this budget not working.
You Have Less than $1,000 in Your Emergency Fund
I’m a firm believer in being frugal. I believe we need to plan our lives as thoroughly as possible (and remember there is a financial aspect to every faction of life). But. We really don’t know what tomorrow will bring. It’s important to be able to handle emergencies when they arise. It’s also important to be able to handle emergencies with cash so a financial emergency doesn’t further exasperate any problem.
I think an emergency fund should be as large as possible, certainly not less than $1,000. One thousand dollars is and isn’t a great deal of money. When you don’t have it or are trying to save it, it’s big. So…you build it a little at a time—with regular deposits. Once you’ve saved it, it can be a little scary to think about how quickly it could be gone; that’s why I recommend that you keep adding to it. The advantages to having funds to cover an emergency are (1) sometimes you get a better resolution if you can pay immediately, and (2) any money you don’t have to borrow is money you don’t have to pay to use.
Even though you may not know what or when you’ll be in an emergency situation, you can be financially ready to handle it. If you control the urge for immediate gratification, it’s becomes more likely you’ll have money to save.
Not having emergency funds is another example of poor spending habits.
Solution: Start saving money. Small amounts will add up.
You Don’t Have Long-Term Financial Goals
People don’t try to do what they think they cannot achieve. In general, people who don’t have long-term financial plans don’t believe they can reach a set of long-term financial goals. Because they believe they won’t reach them, they believe there is no point in goal setting.
Solution: Set small financial goals and reach them. That way you’ll develop a history of achievement and can increase your expectations. For example: If you don’t have an emergency account, building one to $1,000 would be a good way to start. You could make your goal to put $10 a week into a fund designated for emergencies only. Note: That might require that you avoid instant gratification—a few coffees or a lunch out once or twice a week.
Money should be empowering.
Money should make you and your life better. Without action, to be concerned about your financial state is nothing other than worry. Worrying about money is counterproductive. Use your money to make your circumstances better and prepare for whatever may be coming. Enjoy life. Start using a financial plan (budget). Stop using poor spending habits. Don’t let the impulse for instant gratification ruin your budget. Use it to
Conclusion:
Is instant gratification ruining your budget? If so focus more on the reward of having a budget and less on what you miss out on.
If instant gratification ruining your budget, it’s likely you suffer from poor spending habits and the lack of a good financial plan (a budget). At a minimum consider the spending/saving traits I given above and how the impulse for instant gratification could be the root of the problem. Make some changes and keep instant gratification from ruining your budget.