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Most of us are probably familiar with the Stanford Marshmallow Experiment, conducted by psychologist Walter Mischel as part of a study on delayed gratification at Stanford University. It’s the one where children were offered a choice between a one marshmallow now, or two marshmallows if they waited for a while.
The now-famous study found that children who could delay gratification and wait longer for a bigger reward tended to have better life outcomes in various areas throughout their lifetime, including future SAT scores, overall educational attainment, debt and income levels, and body mass index.
The Stanford experiment has never been more relevant than it is today, at a time when technological advancements have led to a society where instant gratification has become the norm.
Whether we want to read a book, listen to a song, or play a game, we can do it instantly, via a device we keep in our pocket. We can shop for food, clothes, and pretty much anything else from that same device, often having it delivered almost instantly. So delaying gratification has become — in many cases — a somewhat pointless inconvenience.
Why Delayed Gratification Matters
When it comes to how your finances play out over a lifetime, delaying gratification can have a huge impact.
Say you get a windfall of $10,000 in your 20s. It may sound like a lot, but honestly $10,000 is not life changing money. You can’t use it to buy a house, for example, or give up your job.
So what do you do with it? (Let’s assume for a moment you don’t have debt to pay off.) Do you spend it on stuff you want right now, or invest it? If you’re good with delayed gratification you might invest it. And that would be a good call, because a single $10,000 investment at age 20 would grow to over $70,000 by the time you hit 60 years old (based on a 5% interest rate).
Another area to look at when it comes to delayed gratification is education. Getting a college degree is expensive, but it’s also time-consuming, involving delaying gratification for around four years. But let’s look at the payoff.
Those with a high school diploma but no college education earned an average annual income of around $34,320 in the US in 2022.
So if you’re impatient to start earning a full-time wage straight out of high school, a good job might put you almost $140,000 ahead of your peers who went to college, four years after your high school graduation (not factoring in student debt).
Over a lifetime, however, college graduates tend to earn earn over a million dollars more on average, than those with only a high school diploma. And the highest earning college graduates earn more than two million dollars more than the highest earning high school graduates.
So how do we cultivate delayed gratification? Is it something that can be learned?
Using Commitment Devices
I first saw this concept referred to as a commitment device in this Forbes article, but I’d actually already been using them in various ways in my own life. A commitment device can take many forms, but is basically something that removes temptation and prompts you to do what you should be doing in order to reach longer-term goals.
The above article discusses how the author Victor Hugo locked away all his formal clothes to stop himself attending parties with his friends, which was preventing him from writing. He apparently kept nothing to hand, but an old gray shawl which he wore every day until his masterpiece, The Hunchback of Notre Dame was complete.
Modern day commitment devices might include putting your credit cards away in a safe or draw rather than carrying them with you, unsubscribing from marketing emails, deleting payment apps from your phone, or using an ad blocker when browsing online. They can even be something as simple as unlinking your payment cards from your favorite online retailers.
Commitment devices make it more difficult or inconvenient to spend money, in a world where spending money has, many would argue, become far too easy.
You can, of course, also decide on a specific reward or punishment that you give yourself for meeting or not meeting your goals. Just try not to make your reward something that cancels out all your good work (like an expensive vacation for meeting your savings goals, or a sugar-filled desert for hitting your health goals).
The simplest commitment device is simply making your immediate environment conducive to your goals. If you want to work distraction free this could be turning your phone off. If you don’t want to overspend on Black Friday weekend it could be staying home rather than going to the sales (and staying off the online retail sites too).
Cultivating delayed gratification can impact your finances significantly over time, along with various other aspects of your life. Think carefully about what would make it easier for you to hit your goals, then put it firmly in place.
Karen Banes is a freelance writer specializing in entrepreneurship, parenting and lifestyle. She writes articles, website content, ebooks and the occasional award winning short story. Her work has appeared in a range of publications both online and off, including The Washington Post, Life Info Magazine, Transitions Abroad, Brave New Traveler, Natural Parenting Group, and Copia Magazine. Learn More About Karen
