Help! Today's price is not tomorrow's price.

Delayed Gratification in a Hyper-inflated Economy

“ Smart financial advice a few months ago – Save up and wait for good deals before buying anything”

“Smart financial advice now – Buy that thing immediately you need, ‘cos the price will go up tomorrow.”

"In the past, smart financial advice was to save up and wait for good deals before making any purchases. However, in today's economic climate, the advice has shifted to buying immediately when needed, as prices are expected to rise rapidly. This shift reflects the challenges faced in hyper-inflated countries like Nigeria, where inflation rates exceed 30%, leading to doubling commodity prices within a year.

This dilemma raises the question: What is the purpose of delayed gratification if prices continue to increase daily? Delayed gratification is a growth mindset that encourages thoughtful planning and gradual accumulation, helping to avoid impulse buying and financial instability. However, this concept is influenced by various factors, including inflation.

Inflation is an armed robber that steals from you now and in the future. In hyper-inflated economies, delaying gratification requires storing twice the amount of money for the same goods or services. Alternatively, I believe 'Buy Now, Pay Later' approach should be considered, leveraging credit to mitigate immediate price hikes. You don’t have to plan for the 12 months and expose yourself to a 100% increase when you can tap into the credit economy and incur interest at 20-30%. There are two major advantages to this approach. First, you would have possession of your needs. Secondly, you will enjoy a cost-savings of 70-80%. This strategy can result in significant cost savings, as high inflation rates may outpace interest charges. Nonetheless, it's crucial to exercise caution and reserve this option for essential purchases, considering the stability and capacity of one's income."

The philosophy of delayed gratification would save the recklessness of today, but it does not guarantee tomorrow will be enjoyed. Please share your thoughts and experiences on delayed gratification with me. I would love to hear from you.

Your Finance Guy,

TL.