Money Management: Need versus Want and Delayed Gratification

Parents everywhere I suppose have experienced the days when our kids would ask for something that we are not willing to buy for one reason or another. It could be because we don’t have the budget for it or we think that it’s just not important.  The usual reply of many parents would be: “We don’t have money.” Or “We can’t afford it.” Or “What do you think?  That money grows on trees?”

I have learned that WORD HAVE POWER.  And as a parent, I decided early that I don’t want my children to grow up with the mentality of lack.  So how do I deal with the situation when my kid wants something that I could not afford just yet?

I never told my kids: “We don’t have money.”  I tell them: “We have money for groceries or for your tuition fees and food right now.  Do you think we should buy that now?  If we buy that, we will have to divert the funds from other priorities. Which do you think is more important now?  Is that a need or a want?”

I think, it is right to treat our kids like adults; talk to them as adults; and expect them to be responsible even if they are very young.  Because, one might be surprised that kids today can be very smart and responsible.  It is wise to introduce our children to the concept of NEED vs. WANT.

If they learn this reasonable concept early on, we won’t have problems with young children, even as young as 5 years old, with throwing tantrums in shopping malls.

I’ve given my kids the power to decide and so far, they have not failed me to decide responsibly.

I remember one time when my 9-year old son wanted to buy an expensive toy.  I told him to think about it.  Just consider the pros and cons.  Whatever he decides, I’m fine with it. (Of course at that time, I already knew that years of need vs. want training has already seeped through his values.)  He decided to sleep over and the following day, he told me: “Ma, I decided not to buy it because anyway, it’s not something that I need.”

It would make every mom and dad proud when our child can already decide wisely on such things.  I tell my kids the story of “Marshmallow Experiment” every now and then since they were young:

A group of 4-year olds were given 1 marshmallow each and promised another piece if they can hold eating their marshmallow for the next 20 minutes.  Some couldn’t wait while some did.  About 30 years later, the scientist followed through with each of the children and found out that majority of those who were patient in waiting for 20 minutes became more successful than the majority of those who could not wait.

The lesson on delayed gratification is a major, major lesson in one’s success in life; whether it’s for one’s career, for relationships, for money or for health.

Delayed gratification encompasses discipline and diligence:  One must make a conscious choice whether you want to pay now and play later or play now and pay later.  If one is not able to put in everything one has while starting his career or business, he will not be able to take his plane to an altitude where he can already relax.

In relationships, how many times do people just could not stop themselves from getting back or just having the last say every time in any argument? Patience in this context does not mean just biting your tongue.  It means knowing that there is a better way of handling the conflict.  Why should you win the battle when you might lose the war? Which is more important? Sometimes losing the not-so-important battle is what it takes to win the war after all.  Is it really that important to have the last say? Or would it be better to delay your need to have the last say for the sake of better communication when both of you have calmed down and are in a better mood? Your relationship after all is more important than having the last say, isn’t it?

In money management, debts that are bad are incurred because of having low EQ (emotional quotient) or emotional intelligence.  Actually, delayed gratification is a manifestation of having high EQ. “I gotta have that NOW!” is one major reason for many credit card debts.  The practice of delayed gratification is not only good at getting us out of indebtedness, but it also helps us get more out of life.  How?  Think of the marshmallow experiment.  If you can just save and invest the small amount of cash that you have now and continue saving and investing; instead of buying just one new gadget now, you can maybe buy a better gadget and a new laptop with the compounded earnings because of your savings and investments.  Don’t you think that it makes sense?

Delayed gratification is just a phrase.  But truly, this is a powerful tool to use for financial freedom, for career growth, for responsible parenting and having a healthy family.

Do you think delayed gratification is important in our life?  When do you think parents should start teaching kids the concept of Need versus Want?

5 thoughts on “Money Management: Need versus Want and Delayed Gratification

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