Delaying Gratification

Have you ever heard of the marshmallow test?  It is a really interesting (and cute!) experiment looks at whether or not four-year-old children are able to delay the gratification of eating a marshmallow for 20 minutes in order to get a second marshmallow.  According to the youtube video description, those kids who were able to wait had higher SAT scores of 210 points on average.  I had learned more about this is my psychology class as we talked about the id which is our instinctual desire to eat the marshmallow immediately, the super-ego which says we shouldn't eat the marshmallow at all since it has no nutritional value, and the ego which says we should do as the experimenter suggests to get twice as many marshmallows and as a four year old we don't have to worry as much about nutritional value just yet.

It is an interesting idea since delaying gratification is a skill that requires an immense amount of self-control.  We are all probably aware of the difficulties of delaying gratification when it comes to eating delicious treats or spending money on something we see in stores and want immediately.  Although this experiment wouldn't ever happen in real life (no one is going to give you double of something if you wait), there are rewards to be had by not acting on impulse.

The first thing that comes to mind is electronics.  The newest toys are always priced at a premium for the trend-setters who are willing to pay extra to be the coolest kid on the block for those first few days to months before other people get the same thing.  However, if you don't need it (it is something that falls more readily into the "wants" category of your budget), waiting to buy can help you reap savings.  For computer memory, this is certainly the case.  I bought a 320GB hard drive many years ago for around $100 but now you can get 500GB or more for cheaper.  Just last year I bought an 8GB USB for around $10 which costs only $5 now.  Not all electronics or consumer goods fall in price over time, but many of the unnecessary toys that are just for your own gratification do and you can get rewarded by waiting to get them.

Fashion is probably another time-sensitive category for purchases.  I am probably the last person you would want to speak to about clothes as I only buy them every few years and wear the same jeans and t-shirts regularly.  I am definitely not an expert so I can't speak with much reliability on the fashion industry, but my idea of the trends is that clothes are fashionable for some time and then they aren't and their value drops drastically.  The actual cost of cloth isn't very high so most of what you pay is for the image and style.  If these don't matter to you, you can probably wait to buy the newest clothes for another year (I know many people wouldn't even want to hear of this which is understandable).  But these are the people who really want to eat the marshmallow now since having twice as many old marshmallows wouldn't be as tasty for them.

Food is another very big form of gratification which we seek regularly.  Eating out is much more expensive than cooking at home but if you can delay the gratification of that expensive Italian dish at your favorite restaurant or limit it to fewer times a month, you could get rewarded with more savings.  And if you invest those savings and grow them over time, you could afford to eat out more regularly after retiring.  This becomes very similar to the marshmallow test although a lot depends on your ability to invest your savings and other factors.

There is value in consuming now which is why you have a choice between consuming that value or saving it for the future.  As a kid, it is really hard to fight the natural impulses of wanting to eat that marshmallow now, even if we are promised another marshmallow in the future.  Even college students tend to live in the moment, taking advantage of youth while it lasts.  But it is still important to think about the future and consider the benefits of patience and waiting for the satisfaction of tasting the sweetness of twice as many marshmallows.