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Tuesday, September 29, 2015

Is Delayed Gratification the Key to Financial Success?

Your standing in a store and there in front of your eyes is a brand new watch at the bargain price of $250. Looks great on your watch and people will notice the next time you sit in a meeting. Do you buy it then or do you wait a few days to think before purchasing it? The way in which you answer that question will likely determine your overall financial success in life.

Many of the purchases we make are based on impulse. We see something that attracts us and our mind starts thinking about all the positive things the item offers. Sometimes this is about its utility and at other times it is more about how we perceive the item in relation to ourselves.

Positive images in our heads leads to positive feelings which increases our impulses to buy the product. We evaluate cost in terms of money and then decide on a purchase. If the item really has us salivating the money seems so much less important.

Those who can plan their purchases, save for items, and cut back spending on unnecessary items are likely to be successful because they can put their money into savings and investments. The more they can delay gratification for unnecessary things and focus on their long term goals the more successful they will be. A few tips below:

-Wait a few days to buy a product.
-Plan large purchases through savings.
-Understand what you need and what you don't need.
-Avoid using credit cards and debt.
-Put away money each paycheck.
-Cut back on fixed expenses and budget discretionary income.
-Rethink the first impulse.
-Evaluate the cost of items in terms of work hours.

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