267 | More Money with Delayed Gratification

Instant gratification keeps too many lawyers stuck in financial messes.

I’ve noticed more and more lawyers struggling with it this summer, and it’s robbing them of their goals.

In this episode, let’s talk about why delayed gratification is a game changer for your finances and some tips to practice it more.

• • what delayed gratification is
  • why instant gratification is catastrophic for your finances
  • how delayed gratification improves your finances and your life
  • tips to make practicing delayed gratification easier

You’re listening to Personal Finance for Lawyers. I’m Rho Thomas, and as a busy wife, mom, and former Biglaw associate, I know all too well the tension between the culture of the legal profession and pretty much everything else you want to do in life. That’s why each week, I’m bringing you the information and tools you need to improve your money mindset and manage your money to create true wealth. Because ultimately, it’s not about the money. It’s about the freedom and flexibility the money affords.

Hey, friend. Welcome back.

Today we are talking about delayed gratification.

It is summertime here in the U.S. and so people want to be outside more. They want to travel. They want to do more. All of that kind of stuff. But there have been a few instances with my clients where delayed gratification is not being practiced and has come back to bite them in the butt.

So, I want to talk about the importance of delayed gratification now. Now, have you ever had a situation where you had the opportunity to do something that you really want to do or to buy something that you really want to buy and you don’t have the money for it, but you would have had the money if you hadn’t spent it on something else that you didn’t care as much about? That happens a lot, and that too is this concept of delayed gratification.

Like not practicing delayed gratification, spending the money on this thing that you don’t care as much about, now you don’t have the money for the thing that you actually want.

Delayed gratification means not doing something that you could do right now, like not getting an immediate reward right now, so that you can get a bigger reward in the long term.

And it comes up a lot with respect to personal finance. So that’s why I want to talk about it. I’m seeing it play out a lot right now and I think it might be helpful for you.

I think one of the most famous examples of the concept of delayed gratification at play is the marshmallow experiment, where kids were given one marshmallow and they were told that if they could wait some short amount of time, you know 5 minutes 10 minutes something like that, then they would get a second marshmallow if they didn’t eat the first one in that time. And there were some kids who were able to do it, and some kids who weren’t.

And I think it’s interesting to think about delayed gratification in the short term like that. Like, I think most adults can wait 5 minutes or 10 minutes for something, but what if it’s a month? What if it’s a year? That’s where it seems to get a little bit harder and that’s what some of my clients are grappling with.

They have goals that might take them a little while to get to, and so the question is, are they willing to delay gratification until they’re able to achieve their goal? Maybe that goal is 6 months out. Maybe that goal is a year out. Are you willing to put off some of the things that you want right now in that time period to be able to get to this bigger thing that you want.

A lot of personal finance is having self-control. It’s being able to tell yourself no to this thing right now to be able to get to this other thing that you want more. And I am not a fan of the deprivation lifestyle, you know, if you are working on a financial goal, you just have to sit in the house, and you can’t buy anything new, and you can’t go out to eat, and you can’t go on vacation. I don’t believe in that.

I think that there is balance that needs to happen with your personal finance goals. Because if you sway too far to this deprivation side, then you end up giving up on the goal because you’re so miserable. But if you’re all the way on the like YOLO, only live once, I got to do this thing because I have the opportunity, then you don’t achieve your goals.

So there needs to be balance there, but because of the fact that there needs to be balance, because of the fact that you’re not going to just do every single thing that is presented to you, there is a measure of deprivation. Right? There is a level of telling yourself no to something that you might want or that you would otherwise do.

I talked with my client charity back in Episode 247and one of the things that she talked about was this illustration that I often did with her, where I showed her, like, let’s say you make X amount of money, right? Let’s, let’s say you make $10,000. If you make $10,000, you technically have the capacity to spend $10,000 every month. But if you spend $10,000 every month, there’s no money left for you to be able to achieve your goals. So you have to tell yourself I’m only going to spend $8000, $5000, whatever it is, so that there’s a space there and you can use that additional money that you’re not spending for your goals.

That is delayed gratification. That is having self-control where you’re not spending everything that you could spend, you are intentionally deciding not to so that you can use the rest of that money for something else that you want longer term.

When you are not willing to tell yourself no when you’re not willing to delay that gratification, it leads to things like being in credit card debt, like living paycheck to paycheck, like not having savings. A lot of times when people come to me with credit card debt it’s because they have not been telling themselves no. They get to the end of the money and they just start using the credit card to supplement their income.

And they tell themselves, I’m just going to pay myself back next month. I’m going to spend a little less next month so that I can get caught up, but it doesn’t happen. And so it becomes this snowball cycle where the credit card that keeps building up because you keep doing that same thing.

So in order to reverse that trend, you’ve got to practice delayed gratification and tell yourself no, sometimes.

Yes, there are going to be things that you do continue to do that you do tell yourself yes to, but you can’t say yes to every single thing because it’s only going to keep you trapped in that same cycle. And what I have seen is, you know, someone wants to take a vacation, but because of all of the other little expenses throughout the year, they don’t have the money to be able to take a vacation and they’ve been putting that vacation on a credit card anyway and telling themselves they’ll figure it out, but they don’t.

Or someone wants to buy a house, but again, all of these other purchases, it led to them not having the savings to buy the house. And so when you are not able to practice delayed gratification, you end up robbing yourself of things that you actually want that you could be doing, but you don’t have the money to do.

Beyond not being able to do the things that you want to do, you also just have the stress that comes with not having the savings or with having a higher debt burden with having to try to figure out how to juggle things, to keep up and all of that.

So practicing delayed gratification gives you that peace of mind because you know that you’ve got the money available for the things that you want in the future. You know that you’re working toward some larger goal, but you also are working toward financial stability. You have money available to save or to pay off your debt or to invest or whatever your financial goal is, right?

When you practice delayed gratification, you have that money available to do those things.

So I want to give you a few things to think about, a few tips that can help you with practicing delayed gratification because it’s something that I’m seeing people really struggle with right now. I think part of it is our society and us being used to getting things quickly, but we’ve got to kind of flip that switch and be willing to practice that delayed gratification to put off some of the things that we might want to do right now to be able to get the things that we really want in the long term.

So the first tip is to set a goal for yourself. What is it that you want to accomplish and in what time?

So for example, I have a client who wants to go into practice for herself. I’ve got one who wants to be able to leave the law altogether. I’ve got a few who have more immediate goals, like paying for a special trip without going into debt. So define what your goal is, because when you know what you’re working toward, it’s easier for you to stay on track with it.

The next tip is to create a budget or a spending plan for yourself. So we’ve talked about this a number of times on the podcast. There are a lot of episodes on budgeting and planning or spending and all of that, but the point being, you want to make sure that you have a plan for how you’re going to spend your money.

So we talked about that hypothetical $10,000 that you’re making, you want to have a plan for what’s going to happen with that $10,000.

When you don’t have a plan, it’s easy for that money to slip through your fingers being spent on things that you want right now. Right? I’m impulsively seeing this thing that I want and buying it and not thinking about that long-term goal that I have.

So you want to create a plan for how you’re going to use that money. How much of it is going towards your bills and your needs like groceries and stuff like that? How much are you going to spend on things that you just want and then how much is going to go towards the goals that you have (the savings goals, the paying off, debt, investing, etc.)?

You want to think about exactly how you’re going to allocate that money, because having that plan allows you to be more intentional with how you use the money.

The next thing is when you’re thinking about that goal that you have that we talked about that first tip, break it down into smaller increments and then celebrate as you reach those different increments.

So let’s say your goal is to save $5000. Maybe you break it down into $1000 chunks and as you reach that $1000 you do something to celebrate—something small. Right? Don’t save $1000 and then go spend it all, but give yourself some sort of treat or something to celebrate yourself as you are going along and achieving your goal.

Something else that I do with my clients when they are working on paying off debt as they pay off a debt, we highlight it in green on their chart. So as you’re going along, you’re making more and more progress. That chart starts to fill with more and more green and that helps to keep you motivated as well.

But the point behind the celebration is making clear in your brain that what you’re doing is good. You’re celebrating, it feels good to celebrate. So as you’re making this progress, you’ve got some sort of treat or reward along the way in those little incremental steps with the progress that you’re making.

And then the final tip with delaying gratification is taking away the things that make you more impulsive. I think it’s how I want to say it. Basically, like, if you are really big on shopping and let’s say you’ve got some favorite stores that you shop at online, take your payment information out of there, like unsave your payment information, because that makes it a lot harder to be impulsive.

Now you got to take a beat, you got to go find your credit card, put the number in all that kind of stuff. So that’s one thing that you can do. Another thing is for some of my clients, they are really big with Instagram influencers where they’re following certain people and these people are recommending this outfit or this makeup or this whatever. We talked about unfollowing those people. Right? Unfollowing those accounts that contribute to your impulsiveness.

So if there is a particular influencer that’s always talking about some new product and the next thing you know, you ordered that product and it’s showing up to your house, maybe unfollow that person or mute that person.

You can also unsubscribe from e-mail. So if there is a particular store that you shop at a lot and you get their emails and they’re like, oh hey, there’s a sale or here’s a coupon or you know whatever it is, unsubscribe from those emails, so you’re not getting them right to your inbox and you’re not so tempted to shop.

The main thing is removing that temptation, making it harder for yourself.

So using a non-monetary example from my own life, I have a huge sweet tooth. I love candy. I love chocolate. When it’s like Halloween or Easter or something like that, where like the kids have candy, I find myself going and getting a little piece like especially— we’ll buy those fun size bags of Halloween candy and it’s like, oh, I’ll just get one. But I’m just getting one, like throughout the day. And so, I don’t buy candy otherwise.

If the candy is in the house, I’m gonna be going and snacking on it throughout the day. But if the candy is not here, I’m not going out to the store to buy candy.

So make sure that you are kind of putting some distance between yourself and whatever the temptation is that’s causing you to spend impulsively and taking you off track from your goals. help yourself to delay that gratification by not having it so easily accessible, by not having it right in your face where you’re trying to resist and use your willpower. Just don’t have it anywhere around and you don’t have to worry about that.

So those are a few tips for you on delayed gratification. Hopefully, you see why it’s important to practice delayed gratification, how you can implement measures in your life to help you practice delayed gratification because if you are not practicing self-control, it’s going to be a lot harder to achieve the goals that you have because you are always spending the money before you can allow yourself to achieve that goal.

So make sure that you don’t rob yourself of the goals that you have. Make sure that you are practicing delayed gratification giving yourself the room to be able to achieve those longer-term goals and not only looking at what you want in the short term.

Alright. So that is it for this week’s episode. Thank you so much for listening.

Please share this episode with a friend or two who you think could use this information. Sharing is how the show grows and as always, I appreciate your support.

As we close out friend, I pray that you take the information you learn here, apply it in your life, and open up to the realization that wealth is available to you. As you do that consistently week after week, you will continue to take steps to take back control of your time, build wealth, and live the life of freedom and choice you deserve.

Talk to you later.