Have you ever seen those commercials for a certain law firm that exclaim, “It’s my money, and I want it now!!” This pretty much sums up our nation today. We are all scrounging for the next materialistic item, and we don’t want to wait for it. We want it now!
Credit cards are in the wallet of nearly every citizen (including children) – many of them with a balance. And, much of the furniture, televisions, and appliances are technically owned by a bank somewhere. Why is it that we buy things that we cannot afford, but we assume we’ll easily pay them off later? Mainly, it’s because the message of instant gratification surrounds us everywhere we go.
Instant gratification plagues us from televisions, billboards, web pages, on buses, and sometimes, the message is even wrapped on cars and SUVs! The advertisements may be for different products, but they all say the same thing – “Look at me! If you had me right now, your life would be happier. Don’t worry, you can buy me with 0% interest for 36 months!”
Credit has made it incredibly easy to get the things we want, but often times it becomes the ball and chain of our financial future. If we allow ourselves to purchase items on credit, our payments increase, which obviously causes our cash flow to decrease. And, with a reducing cash flow, we can easily get trapped in our debts with no way of escape except for making those many future payments.
Once we pay off the debts, the furniture, appliances, and electronics that we bought on credit are now worn out and need replacement. But, since our cash flow was down, we were unable to save money. So guess what? We need to go back into debt in order to make that next purchase, and then the cycle continues. In the end, you’re left with very little money in your investments (if any), hardly any savings, and you have a houseful of old stuff that might still have some future payments scheduled. In my opinion, this is not the way to live.
What if we took a drastically different approach? What if, instead of purchasing our furniture over the course of 36 months at a low interest rate, why not save up some money for 2 or 3 months and buy something a little less expensive? Then, once the furniture is purchased, there is still a positive cash flow for something else – maybe even some investments!
By delaying your gratification and not buying things on credit, your future could be noticeably different. Everything in your house will be paid for, you’ll have money in the bank, you’ll have investments that are increasing exponentially, and you might even have some passive income that earns money while you sleep!
So, the next time you’re tempted with a purchase (big or small), remember to think twice about it and consider what it might do to your future. Chances are, if you delay the purchase, your future will be much better off.
Have you ever made a purchase on credit that you regretted later? Do you live your life with the delayed gratification approach?
photo by jbhthescots