Financial Fitness: The Currency of Self-Control

NOTE: Aging Outreach Services and OutreachNC welcome Financial Wealth Advisor Nathan Cherry’s advice on creating an all-star financial team. Mr. Cherry is a local financial advisor with experience in retirement income strategies, sustainable and responsible investing and charitable giving. We are grateful to Mr. Cherry and Hicks and Associates for their valued insight regarding financial fitness. 

This week, Nathan Cherry writes for ONC readers about the link between financial wealth and self-control, a quality we can develop and grow at any stage in our lives. For anyone thinking another raise or higher income will help bridge the saving-and-spending gap, Cherry’s article comes at just the right time.

The Currency of Self-Control: How Saying No Can Lead to Financial Growth

Self-control is the ability to restrain ourselves from making poor decisions simply for a temporary happiness high.

It’s reported that Thomas Jefferson once said, “Nothing gives one person so much advantage over another as to remain always cool and unruffled under all circumstances.”

I remember the first time I heard this quote. I was a young 20-something teaching in a small private school. I had a student who knew how to push people’s buttons, including mine. After one particular incident, the student’s mother, who also worked at the school, gave me this quote in response to her child.

I’ve been working on self-control ever since.

Every day we face decisions which test our self-control: stay in bed and skip the workout, eat another brownie, buy that pair of shoes, or even whether or not to cut corners at work. Our ability to make good decisions, to consistently exercise self-control, plays an integral part in our overall well-being. It certainly plays a crucial role in our financial health and well-being.

Many Americans believe the amount of money you earn determines whether or not you will be wealthy. I don’t believe that. I’ve sat with far too many clients drowning in debt despite their high six-figure incomes. And I’ve sat with clients earning modest salaries who are now retired millionaires.

What’s the difference?

Part of the difference can be illustrated in a decades old experiment by Dr. Walter Mischel. In the 1960’s, Dr. Mischel conducted an experiment on 5-year-olds, in which they were sat in front of a marshmallow and told not to touch it for 15 minutes. Their reward, if they exhibited self-control, would be two marshmallows. The results of this experiment led Dr. Mischel on a 50-year journey of studying self-control. A New York Times article commented on his long-term findings:

“Famously, preschoolers who waited longest for the marshmallow went on to have higher SAT scores than the ones who couldn’t wait. In later years they were thinner, earned more advanced degrees, used less cocaine, and coped better with stress. As these first marshmallow kids now enter their 50s, Mr. Mischel and colleagues are investigating whether the good delayers are richer, too.”

I think I know what the conclusion to their study will be: people with self-control end up with more assets in the long run.

It’s not that surprising if you consider it. Who would you think has more: the person who lacks self-control in their spending or the person who carefully tracks their income and spending?

Self-control is a critical aspect of building wealth. It’s a currency all on its own. Self-control is the currency that, when gained, guards the bearer from making silly decisions for mere happiness. Remember, happiness is a temporary high that fades. Our goal should be joy, which is a lasting peace and contentment that transcends possessions and experiences.

The current trend, however, is to spend and buy whatever we want, whenever we want. The belief that “I deserve it” is pervasive and continues to be driven by advertisers looking for the next sale. Our consumer mentality has brought us more material possessions than any other generation in history, but less peace, contentment, and joy.

Our lack of self-control has resulted in a lot of “stuff,” but far less wealth.

I’ve interacted with numerous people who, in one breath, complain about debt and lack of cash flow while in the next breath talk about their new car and Disney vacation. Somewhere there is a disconnect between the cause-and-effect principles that have led to their current financial position. Many people falsely assume that if they just had more money, they could get out of debt and save more. But the truth is that if you can’t save 10% of your current income, there is little hope that you will save 10% of a higher income.

Reducing debt and saving are not merely about your level of income, they involve self-control. It’s the ability to say no to impulse buying, bad choices, and frivolous material possessions. The wealthy, who often have self-control, have the ability to look down the road and see the return on any investment, including everyday purchases. Recognizing the waste in buying the latest and greatest product just because it’s a year newer than the one you have now is a key in obtaining the currency of self-control, and wealth.

A financial article I happened to come across not long ago explained that “45% of Americans don’t have a penny saved for retirement, and three-quarters of survey participants say they have less than $50,000 stashed away.” Those are terrifying statistics in an age when people are living longer, and costs are soaring. But the all-too-familiar reasons for why people are not saving were less shocking but just as disappointing.

The top two reasons for why people aren’t saving and growing their wealth, according to the above-mentioned article, is that “they don’t think they make enough money to save”, and “they have too many bills to pay.” Each of these results from a lack of self-control. Even if you make a modest wage, you have the ability to save some of it. Saving $50 per month is possible. The bills you pay are a result of your decisions. There is no hope of changing your financial future without first accepting responsibility for the choices you make.

There’s no way around it: you need self-control.

This unusual currency is illusive in our current consumer-drive culture, but is also a critical component to true, lasting wealth. This ancient commodity used to be far more common but is now endangered and requires intentional cultivation for anyone seeking its treasures.