Instant gratification

[justginger]

Kenny's thread on homeowners finishing up their mortgages got me thinking about the concept of instant gratification (as we chose to go the 'starter house' route, while the vast majority of our peers have moved directly into much bigger, newer homes).

In my city, it seems that 'youngsters' are EXTREMELY motivated by instant gratification. And by youngsters, I mean primarily those in their 20s, but I've definitely seen the attitude stretch into the 30s as well We're talking people in their early-mid 20s that have moved out of their parents' houses straight into a either a house they've built or one they've deemed worthy of being a 'forever family home,' to the tune of half a million dollars (sometimes well over half a million dollars). They have brand new cars, on lease or loan. Their new cars have new rims and new subs and new systems. Brand new furniture, bought on credit or interest-free for X months. Brand new landscaping, not complete without a pool or hot tub. New tattoos at $300/hour for the artist. Brand new handbags, and shoes, and outfits to match. They party every weekend, buying $22 cocktails hand over fist. They have holidays every year, sometimes financed with unsecured personal loans (with interest rates of 20%+).

I am not like that. I am usually pragmatic and tight to a fault, except when it comes to my pets and foster animals. Then I shell out unreservedly, but I try to do so when things are on sale. We passed up on a block of our dreams last year because I wasn't willing shoulder the risk in exchange for the instant gratification (I still imagine going up and camping on that block though... ).

However, I did get a bit of a wake up call when I took my ring in to be appraised. The lady admired it and then looked me straight in the face to say, "You know, most of us have to wait many, many years to get a piece like this. I hope you appreciate it."

I guess I'm NOT above instant gratification.

What about you guys? Do you think you give in to the wants of 'right now' or are you always clever long term planners? How do you decide where to draw the line, in terms of enjoying life now versus not being too frivolous to ensure long-term financial health?

 

[arkieb1]

Hi Ginger,

I don't think you can own largish diamonds in Australia without admitting to some form of instant gratification as smaller to mid sized diamonds are the norm here. As to houses, I don't know, I have bought a few houses and done them up selling them for a profit working my way up & also owning ones worst house best area for investments. I am in my early to mid 40s so maybe its a different mindset.

I love clothing and shoes but I tend to only buy on sale and can live without them if I have to.... I am also into my animals and my family. I've met young people with a spend it all and live on credit mentality here in QLD and others that are living with parents saving up as much as they can for a deposit for a mortgage. I also know a select number of people my age who spend money like water too and live week to week and have maxed out credit cards, so I guess it depends on the person. Stupidity with money and instant gratification is not confined to any age. I had a good friend that used to blow almost all her pay check which was large because she was a lawyer on shoes......

 

[Polished]

I know young couples (on good salaries) who have bought houses for as much as a million, and they've admitted that they "killed themselves with the mortgage". They justify it by saying it's the thirty year house and they won't need to go through the hassle and considerable expense involved with moving sometime down the track. While this didn't happen in earlier times, I also saw friends of my parents up-size their houses, when they could afford it, complete with swimming pools and tennis courts just as their children were near to leaving home. There aren't easy answers to these questions and I guess people have to weigh up their priorities and potential earning power when making these decisions. Sometimes it seems though that people don't leave anything to look forward to! We found the extension we put on our house got a bit out of hand cost wise.

One of the reasons behind the McMansions that seem to have sprung up all over the place is that while land is expensive, building a house on it has been relatively less expensive, expanding the size of the house at the time of building has been even more cost effective. Hence people opting for bigger and bigger houses whether they really need or even want the extra space.

I think it's not just what you get but the way you get it that matters. The lady who commented on your diamond ring, didn't know that it was purchased with 2 years worth of overtime. Not that what she said was offensive but I don't think Poppy's purchase falls into an instant gratification category.

 

[missy]

I think we have a happy balance.

After I finished graduate school I rented for 3 years in my neighborhood, saving money towards a home purchase. I bought my very first home after 3 years of renting. It was modest but it was my "dream" home at that time and 9 years later I sold it (for 4x what I bought it for-that was mainly luck on my part as the area was hot hot hot) and my dh and I were able to purchase our together "dream" home in the same neighborhood. Same thing for our jersey shore home. Bought in 1999 and sold it more than a decade later to be able to purchase our (hopefully) final dream home at the shore where we plan to retire. At no moment in time were we house rich cash poor. That wouldn't have made any sense for us. Peace of mind is key for my mental health and financial security while never guaranteed (because one never knows what the future may hold) is important for my peace of mind.

So I wouldn't say we had instant gratification by any means but at each stage we were happy and content with where we were and always had a long term plan. Granted that plan has changed over the years as even the best laid plans tend to do. As that wise phrase goes-the only constant in life is change. So true. The best one can do is reach a balance that works for them.

Along the way we took many nice vacations, bought many nice things and enjoyed spending time with each other. While I love my material things the most important luxury for me is getting to spend time with my dh and my other loved ones. Time is precious above all else and something you cannot ever get back.

I try to live in the moment enjoying each experience but always with an eye towards the future hoping we will be fortunate to spend our later years in good physical, mental and financial health. Nothing in life is guaranteed though and that is why it is so important to enjoy each stage to the fullest.

 

[JewelFreak]

I guess people have to weigh up their priorities and potential earning power when making these decisions.

That's the rub, & why so many people went into foreclosure the past several yrs. Except for our first condo, where we got hosed by a big recession, we've tried to buy houses we could afford on one salary -- just in case. Your potential earning power is power only as long as you have a job & about that you never know. It scares me to be overextended.

We haven't taken a big vacation in years -- the animals cost too much! I would never trade them for a holiday or anything else, but would also not do both on borrowed money. DH spent a lot on his antique cars but for the last 10 yrs, hasn't done anything more. My only splurge is gems & jewelry. We've always saved, though not to the point of being stingy. Borrowing money for impermanent things isn't my style; I'm too chicken for that. Prefer security to luxury. No, I prefer luxury but won't sacrifice security for it.

--- Laurie

 

[rosetta]

I am very much NOT into instant gratification. If anyone's been paying attention, I haven't bought any jewellery apart from two settings since I joined PS in 2010. I've passed up many a piece so that I can purchase what I really want later on. I've seen many PSers upgrade in the meantime (and wonderful upgrades that I've enjoyed vicariously!) and it hasn't influenced me in any way (apart from design ideas of course!)

I think part of it has to be that the cost of living is high in London. So we grow up watching our pennies. I've seen lots of people go under here because they've spent money they never had, in particular they over stretched on mortgages. I'm not sure if you were talking about a million Australian dollars (about £600,000), but if so, that wouldn't go very far in my part of the city (it would buy a small 2 bedroom flat) For forever homes, we are talking a million pounds plus here. My in laws have a nice home in a very lovely part of London, but by no means a mansion, with a current market value of £2.5 million.

With these kind of prices, you can see why, if you want a nice house, you can't have an instant gratification mind set! Most people will climb the property ladder very slowly, it was possible to make big profits before when the market was booming but not any more. We have opted to scale a couple of rungs at once, and so we still haven't bought a home. We refuse to over stretch on a mortgage and so the only other option is to save a huge deposit. We are in our thirties and the only couple out of our friends who are still homeless!

So I'm all in favour of waiting for what you REALLY want and not buying what you can't afford right now.

 

[jazzoboe]

I guess I'll jump in here for a young perspective. I'm about to turn 26, so I definitely fit among this generation that has finished school in the last few years and is now buying, responsibly or otherwise.

As for myself, my DH is an engineer and makes pretty decent money for only being out of school a few years. I, however, am a writer. I just finished my MFA, am working part-time as a tutor, and working full-time trying to finish my final (for now) draft of my book before pursuing publishing for it. So while we are comfortable enough, we have married friends bringing in 2 decent incomes, which makes a huge difference. We purchased a modest home about a year and a half ago. The mortgage does not kill us, but admittedly we are not saving as much as we would like to right now because I am starting to pay off student loans. Aside from that, we don't spend a lot. We were going out to eat (~$20-40 for dinner for both of us) probably once a week or so, but since the loans kicked in, that has been cut back. I have bought a few new clothing pieces recently with job interviews in mind, but probably spent no more than $300 total on clothes so far this year, and that's stopping for now, too. We went on vacations the past 2 years ($3000 for a week in Europe and $1300 for an all-inclusive in Mexico), but will not go anywhere this year. We have purchased a few new, somewhat more expensive (aka not from IKEA) furniture pieces that I expect will last us many years, and we either paid cash or took the interest free financing, but paid it off the next month.

With friends and peers, I see both ends of the spectrum. We have plenty of friends (mostly married) who are still renting relatively small apartments, and don't go out a whole lot or buy a ton of stuff. I also see some now buying and building homes much nicer than ours and going on extravagant trips a few times a year, but I try hard not to judge since I don't know their financial situation. And if it puts them in debt, it is their problem and not mine.

It's hard not to want the instant gratification, especially when I hang out on PS and see all the amazing bling that I know I won't be able to afford for quite some time. I think our upbringing has a lot to do with how we think about money, though. For example, my family never had a lot of money. We always had what we needed, but often couldn't have extra things we wanted (toys, activities, etc.) and very rarely took any kind of vacation. When my parents were my age and just married, they were dirt poor. They worked hard to get to where they are now- owning a modest house and living fairly comfortably. But I never took that for granted. DH's folks, on the other hand, make quite a bit. You would never know it if you met them, though. Their house is about the same size/style as my parents, and they don't seem to buy expensive things or go on trips. However, they blow through their money. They go to the casino, they go out to eat whenever they feel like it, they go shopping and rack up massive credit card debt. On many occasions they have borrowed money from their own children to pay their monthly bills. And it's led them to fight about money a lot. Luckily, DH has seen this and is pretty disgusted with it. We've made it clear since we were married that our money is off limits to them. As a result, DH is careful with the money and won't let us do anything outside of our means.

 

[SB621]

I'm a VERY instant gratification type of girl. I searched for my dream cushion for months and when DH green lighted me I had one picked out within 14 hours (after dragging him to at least 8 stores and being on the phone for hours to places in NY). DH hated his last car- fine you hate it, let's get something different and that is a better fit for our growing family (when from small compact car to large SUV).

BUT there is a method to my madness. If I can justify the purchase meaning is it good for our family, something we need, or a special gift then I do it immediately. I work hard so that we can do these types of things. I always make sure we don't over reach ourselves and money still goes into savings. SO if we can swing it we do it right away. I think some of this mindset has really been pushed on me though being a military spouse. I never know when my DH will be around, if he will be there, if he will leave for the next year or if he will even come home. It's hard to plan for the future so I live in the now.