The power of waiting to buy things
We live in a world of instant gratification - it's the worst.
- You see an ad for a pizza on Instagram, and in a few clicks, you are watching the progress of the pizza delivery process on our phone as it speeds to your house - almost before you have decided that it's what you want for dinner.
- Hear a song in a cab that you like, you look it up and download every song from that band, EVER....instantly.
- You see a cool watch that is out of your price range, but you would love to have so you buy it on an installment plan which you were instantly qualified for, and suddenly, this amazing item is yours (after that last payment clears).
I am all about quick pizzas and never-ending access to media, but there is something lost in buying big things instantly instead of saving up for them slowly over time. When you were a kid, you (probably) didn't have access to credit. If you wanted that new bike, you would have to save. If you were like me, you would try and figure out all sorts of innovative ways to make a few extra dollars, which would go into the "bike fund." Whether it was mowing a neighbors lawn or painting fences, every additional $1 went towards that bike.
Then one fateful day, you would have enough money! It was like Christmas, and your birthday decided to throw a joint party called "Sam buys a bike with his own money!" Not only did the act of saving up for months feel good, but I assure you that I treated that self-bought bike with more care than anything else I owned. No "oh, I left it out in the rain" for Sam's Giant Yukon mountain bike.
The positive impact of waiting to buy something is actually a widely studied phenomenon. Most famously explored by psychologist Walter Mischel, Ph.D., who designed the Marshmallow Experiment(1).
In the experiment, a child is a plate full of marshmallows and is told by the researcher that they had to leave the room for a minute but would be right back. If the child waited until the researcher returned they could have two marshmallows, but if they couldn't wait, they could ring a bell, and the researcher would come back, but they would only be able to have one marshmallow. Elegant in its simplicity, the study provided a very clear look into how people deal with instant gratification. Even more impressive is that Mischel followed the progression of the children he studied over time, and the ability to resist instant gratification actually held true for most of the people in the study. If you avoided that quick single marshmallow as a kid, you also avoided some of the more grown-up vices like gambling later in life (2). It's fascinating stuff.
So why are we talking about delayed gratification and marshmallows as a fintech company? Because we think you should incrementally save overtime for that big purchase and make its value to you exponentially higher.
The Astra mobile application makes saving for purchases, big or small, as simple as a few clicks. Just launch a new savings goal, name it and then use one of our several Routines like "round-ups" or "sweep transfers" to automatically move money from one account into another. That's it. Once a goal is live, you can track its progress via the application home screen or automated alerts.
It might take more time to save up for that sweet new bike you have been eyeing, but I assure you that once you hit that goal and can buy it for cash and not credit it, seeing it will make it worth the wait - and you will never leave it in the rain.
Happy saving - your friends at Astra.
Sources:
(1) https://www.amazon.com/Marshmallow-Test-Mastering-Self-Control/dp/1469249081
(2) https://www.newyorker.com/science/maria-konnikova/struggles-psychologist-studying-self-control