There’s a famous old saying: “An ounce of budgeting is worth a pound of financial stress, maneuvering, and scrambling from paycheck to paycheck.” Ok, moderately famous.
But it’s true. Our ability to plan ahead has everything to do with alleviating the perceived pain of our finances.
There is a very famous study (this one is actually famous), where researchers put a child in a room with one marshmallow. They have to sit alone in the room with it just staring back at them. And then they are given the choice to eat the marshmallow or wait 15 minutes and get to eat two marshmallows. They are testing the ability of these children to delay gratification.
You are probably thinking, “Two marshmallows. Double delicious. It’s a simple, obvious choice.”
Now apply it to your budget. Budgeting is delayed gratification, that is all it is. Budgeting is one marshmallow now, or two marshmallows later.
You have money in your account. You could spend it right now. Or you could wait, so that when Christmas comes, you have an overwhelming amount of gratification—enjoying a holiday paid entirely with cash. Double delicious!
The researchers followed the kids over the years, and the kids who could wait were generally more successful in life. So interesting, right?
The ability to defer a good thing now, for something better later—that is just discipline. And it is what budgeting will do for you.
I don’t believe we are born with this skill, but you can practice it, learn it and benefit from it.
Budgeting is just a way to 10x your life achievements. Pretty simple and kind of obvious, don’t you think?
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