Delayed gratification, or deferred gratification, is the ability to forgo immediate rewards in exchange for the promise or expectation of a more significant or lasting benefit in the future.
Research increasingly links the ability to defer gratification to a range of positive outcomes, including academic success, improved physical and mental health, and stronger social skills.
Original research on this includes the Stanford marshmallow experiments undertaken by Walter Mischel, a professor at Stanford University. These experiments tested the ability of children to resist the temptation of a marshmallow in exchange for greater sweet rewards later. The researchers concluded that those children who were able to wait longer for their preferred rewards tended to have better life outcomes, based on future educational achievements, BMI and other life measures. The findings of these results have been challenged in more recent versions of these tests however, the idea of deferred gratification certainly has direct links to our ability to save for the future.
Many savers report having little empathy for their future self. Even though we know, logically that the future us will have wanted the current us to plan for them, emotionally it remains difficult to view the needs of that future version of ourselves as anywhere close to as important as our current needs. Even though it still relates to us!
Bringing our future needs to the front of our minds is one role for a financial planner. One way to do this is with cash-flow planning tools. These can build a visual time-line of the future, for you and your loved ones, and can add in future goals. A visual time-line can be more powerful and compelling for certain people, than merely the abstract idea of a future them needing some more of your money!
