Get Rich With: the “ChaCHING!” Instinct

bellagio_fountainsAhh, Delayed Gratification. It’s one of the defining advantages of humanity itself: the ability to put off immediate pleasure, for the purpose of getting even better results in the future.

Compared to lower animals or insects, we’ve got this ability locked down. Leave a dog in a room with a piece of tasty meat and a chart showing that dogs earn a 20,000% annual return for any meat left uneaten, and the dog will still choose not to invest.  But while most of us can out-strategize our pets, we humans still vary widely in our ability to set aside resources for the future.

This difference in abilities starts to show itself very early in life. My favorite example of this is a famous old psychological study that looked at young children, offering them one cookie now or several cookies in a few minutes. When left unsupervised, some kids immediately grabbed and ate the initial bait, while others exercised their willpower and emerged from the trial with a bigger bounty in exchange for waiting. The results were noted, but the researchers then kept in touch with these children, following through on their lives as young adults.

As it turned out, the pleasure-delayers did better in school, graduated to get better jobs, and ended up in higher-paying careers as adults, with fewer debt problems.

I saw similar results with some of my subcontractors back when I ran a small house building company.  One worker in particular would take his payment every Friday, and immediately convert it to cash at one of those ripoff check-cashing places. On the following Monday, he might show up with new accessories on his car and a new pair of sunglasses that were more expensive than mine.  He would drive to the fast food restaurants every day for lunch while I ate my peanut butter sandwiches. And long before Friday, he was out of money again.

What is it that separates the instant gratification crowd, and people like Mr. Money Mustache, who hasn’t had less than $1000 of just-in-case money sitting around since sometime before age 15? Are the spenders the only ones out there having all the fun, while I sulk at home, worrying about money?

A recent article in NBC news* offered another peek into the psychological differences between the saver and the spender. In that story, a neurological researcher actually watched the brain activity of various types of people, and noticed that those with a better ability to imagine the future in detail were also better at making wise financial decisions like delaying purchases.

That sounded just about right to me, because I am a compulsive future-imaginer. I’ve already got my next several years worth of projects, trips and blog posts mentally mapped out, and sometimes they swim around in my head so much that I have to remind myself to practice the Zen habit of living in the moment and breathing calmly. Fortunately, at that point I get to look around at my present life, and marvel at how exceptionally good it is as well.

And with all this background, we can finally understand the difference between savers and spenders right as they stand in front of the cash register, about to make a purchase.

The compulsive spender thinks mostly about what is in his hand: “I want it! I want it, and I’m about to HAVE it! Yeah yeah yeah!”

The future-oriented saver thinks more about the eventual results: “This is something I have decided to buy. It will reduce my monetary wealth, but I estimate that the added life benefits over time will exceed the loss caused by the missing money. I hope so, anyway. ”

More significant is the feeling each person gets when he does NOT make a purchase:

Spender: “Hey! I wanted this thing and I don’t get to have it! Waaaaah, Waaah!!”

Saver: “I just avoided a purchase, and I am richer because of it. Cha-CHING!!”


This has great implications in the often-challenging field of Not Spending All Your Money. The common wisdom is that you create a “budget”, and allocate a certain amount of your money to savings, and the rest to “guilt-free spending”. During the initial period of spending, you get to say, “Yeah! Yeah! I’m buying stuff! Hooray!”. Then when you hit the ceiling in each category, you’re back to “Waaah! Waaaah!”

Mr. Money Mustache has always suggested that budgets are only for beginners. They are built on the assumption that the “Yeah!” stage is desirable, and you will only stop when you reach the limit. Take as much instant gratification as you can each month, but cut yourself off before you do too much damage.

Instead, what if you could make the NOT spending just as rewarding as spending feels to the regular consumers? You can, of course, and it’s very easy – it’s just a matter of cultivating your own little ChaCHING instinct.

Every time you don’t spend unnecessary money, you have won a little game. It is a game of becoming stronger, wealthier, more focused on what really matters in life, and more able to do the same thing next time. You have simultaneously both increased your means, and decreased your needs.

Your safety margin and independence in life just grew a little bit, and the entire rest of your life will now be better because of it. Just from avoiding or delaying a single purchase. What a spectacular reward! ChaCHING!!

If you currently need more money, and yet feel like reducing your spending would be an unpleasant deprivation, this article is for you. You just need to work on your Cha-CHING instinct to reverse your idea of what is rewarding. Feel each little win. Compare it to the lifelong drain of a loss. Add up the little wins and watch as they multiply to become enormous.

Think in more detail about the future, and the peaceful feeling of knowing that money is something you will never have to worry about again. Or the giddy feeling of knowing you don’t have to go to work ever again, even while you might choose to do so with great enthusiasm.

The older I get, the more I realize that the future really does arrive on a regular basis. Gifts set aside by the younger me arrive in my current life, and are much appreciated. By imagining your own future more vibrantly, you too might see fit to give some gifts to your future self. You’ll be thanking yourself sooner than you expect.



* While the NBC story was interesting, the reporter seemed to miss a key financial point with this sentence:

“consumers who can really, viscerally imagine how great that new car will smell when they drive off the lot, or how excited they will be when getting the keys to a new home, have a much easier time saving money.”

Sorry, Mainstream Media, but putting aside money for a great-smelling new car is not saving.. that’s just spending in bigger chunks. Investing money into assets that generate passive income that can meet your needs (including the very occasional car purchase) for a lifetime – that is saving.

  • Zinnie June 5, 2013, 7:07 pm

    Great article, MMM! There are hilarious re-creations of the Stanford marshmallow experiment online; it is quite clever the things that kids come up with to distract themselves from the candy. I laughed so hard watching them.

  • Jane Savers @ Solving The Money Puzzle June 5, 2013, 7:40 pm

    Too bad I can’t go back and give the younger me a kick in the behind so that she would deposit some gifts so that future me wasn’t so broke all the time.

    • CincyCat June 6, 2013, 9:51 am

      I feel the same way sometimes. Our younger selves were actually completely free of consumer debt & credit cards TWICE before in our relationship, yet we did not change our spending habits. We’re paying for it now in round 3. We don’t spend a lot of time dwelling on past mistakes, tho. We’ve learned the lesson (finally) & are committed to taking a better path moving forward.

  • Just Call Me Al June 5, 2013, 7:41 pm

    I’ve often wondered about this: are savers (delayed gratifiers) natural leaders? Leaders, that I don’t need to define HERE, are in my estimation, of the saver mentality. I was raised by a saver and a spender. I came out…both. I have still done well because of it even though I am now an emblematic “saver” only. The psychology of a spender is that they deserve it, need it, can have it even on credit. A saver has a big picture less simplistic than a spender and enjoys the sales, the accumulation, the restraint. I don’t want to ramble, just wondering if the smart folks here have ever come across or read anything that backs that up—that a “leader” is a saver.

    • 5inatrailer June 6, 2013, 7:47 am

      good thought- I think this deserves some more exploration. I would like my kids to be savers and leaders too…

  • Steph June 5, 2013, 9:05 pm

    Have you seen the Keith Chen’s TED talk about how language can effect your ability to save? This directly relates to how we see time. Very interesting!

  • Kristen June 5, 2013, 9:06 pm

    I have just started reading this blog so I am new to this. I am not new to focusing on saving though I do have a lot to learn. One thing I am curious about is thoughts on running shoes. I know this sounds silly but running is my passion and my form of exercise. Living in southern CA, it doesn’t require a gym. People may say it is free but those people have not bought good running shoes, which run about $100 every three to four months. I have tried cheaper but have had problems. I feel guilty about it and my friends who see me as the “frugal one” are shocked by this expense. Any suggestions on a way around this expense? Or do I just consider the fact that it adds value to my life and not worry about it?

    • Mr. Frugal Toque June 6, 2013, 11:34 am

      Do not feel guilty.
      Running has to be one of the most Mustachian things you could do, right up there with bicycle commuting.
      It contributes to your health which, since you’re American, will save you on your insurance.
      It will also contribute to your enjoyment of life, as healthy people live longer and live better.
      While you’re running, you’re not doing a whole bunch of other expensive Clown-type activities like “going for a drive” or “watching television”.
      If you have kids, you’re setting a great example.
      And if you like your knees, you’re going to want to be kind to them.
      Purchase the good shoes and don’t feel bad about it.

    • Mrs PoP @ Planting Our Pennies June 6, 2013, 12:05 pm

      Do NOT feel guilty about it. I spent more to run on a per mile basis last year than the IRS thinks it should take to run a car. But I also ran 2K miles, which feels like no small accomplishment. Here’s the data on the calcs for the data junkies: http://www.plantingourpennies.com/the-costs-of-running/

    • Lina June 6, 2013, 2:26 pm

      I wouldn’t feel guilty about the running shoes. Most of us are not frugal in every area. I love doing triathlons which add up because it is not just the running shoes but also biking and swimming gear.

      Here the running shoes cost between 250-300 USD so in comparison you get cheap shoes. By exercising I believe you will gain massive health benefits that offset the shoe expenses in the long run.

      • Kristen June 6, 2013, 9:43 pm

        Thank you for your replies. It is what I thought but wanted to make sure I wasn’t missing some DIY shoe making article :). I guess I can’t complain over $100 shoes compared to $250. Yikes! I am also interested in getting into triathlons. So fun! I got the swimming and the running thing down but something tells me that a beach cruiser isn’t going to cut it in a triathlon.

        • Mr. Money Mustache June 6, 2013, 10:09 pm

          Kristen – have you ever tried running with simpler shoes, as described in the book Born to Run? I used to be all into the high-tech maximum cushion setup, but after that book I started experimenting with thinner and thinner shoes. Now I just run in bare feet whenever possible, or if necessary some flat converse-style shoes that have almost no padding. And I learned to land on the balls of my feet rather than the heels, which makes all this comfortable. For me, this allowed me to start running further without weird back-of-knee pain that used to come up after a few miles.

          But I’m not a competitive runner at all, so this is all just from my junior hobbyist’s perspective. Real runners will have more wisdom.

          • Patrick June 7, 2013, 5:18 am

            Oh yeah, now we’re talking! I love/hate running, and I rock the 5-fingers and occasionally go barefoot. I don’t listen to anybody’s advice on shoes, and wear the same shoes that I completed my last marathon in. They probably have about 3,000 miles on them (with holes and everything), but I just rotate through old shoes. I am injury free after all sorts of stupid knee problems on expensive shoes.

            Born to Run is a MUST READ for everybody, but especially for Mustachians. I had the immense pleasure of running with Chris McDougall years ago which sealed the deal for me – that dude is a rockstar. It’s my ALL time favorite book – and actually has a lot to say about simple living, questioning whole industries, etc. Can’t say enough about that book, and I’ve found a lot of therapy in running over many years.

            The bottom line is that expensive shoes are for suckers — just like most expensive things. Just plain ol’ ain’t worth it, and there’s plenty of evidence that modern, expensive shoes are actually injuring hordes of people and therefore turning them off a very natural and soul-enhancing activity.

            I ride my bike everyday, but occasionally just run the 7 miles there then home. There’s a monster runner out there on the Potomac River at 0600 some days just BEATING ASS down the river trail. I mean, I have trouble catching him on my bike. He’s not wearing shoes.

            Run, Sister. But, forget the fancy shoes. Go look at what the Kenyans are doing — I promise you’re not going to see Nike peddling their overpriced garbage over there.

            • Andy June 7, 2013, 6:01 am

              I agree with you guys. Born to Run was great and I much prefer minimalist shoes or bare feet. Also got to run with McDougall and a few of the other big names at the NYC barefoot run a couple years ago, very fun. I just wanted to add a caution though for people interested in making the switch. Don’t jump into it full steam with no preparation. You can and probably will injure yourself with the minimalist style if you don’t prepare your body.

              Start by learning about Pose running or any of the other options that encourage forefoot landings and proper technique. Implement better technique even while still using your traditional running shoes. Then, when you start giving minimalist shoes or barefoot a try, start with very short distances. Your calves and foot muscles will likely be real sore at first because they end up working much more. You can then gradually increase the distance of runs as you become adapted. As an aside, even if you stick with traditional shoes, you can probably wear them for much longer than the shoe companies advise. They just want to keep selling you new ones as frequently as possible, but it’s not really necessary (believe me, I used to sell them).

              Patrick, it sounds like you’re in the DC area. Are you going to the Naked Foot 5k in 2 weeks?

            • Patrick June 7, 2013, 9:20 am

              Yo Andy!
              It’s entirely possible that I ran with you in NYC those couple of years ago… were you at a local bookstore in Brooklyn? I believe it was an 8-miler that took us from the UWS through Central Park. That would be a real trip.

              You’re totally right about the switch, and the calves will come a’ screamin’. I don’t always go barefoot or 5 fingers because I tend to run much better but much slower. My endurance goes through the roof without pain, but sometimes I do like to hard strike like a MOFO and just RUN. The knee ususally suffers later, but it’s fun as hell. Last weekend, I was out in the sticks and wore a pair of dress shoes (only thing I could find, and the roads were rough) to run about 5 miles. It was hilarious, but the giant hot spot on the ball of my foot wasn’t too hilarious.

              Point is, humans are built to adapt. It’s the thing we do supremely well, yet we seem to be shying away from it in our air conditioned suckiness. Ugh.

              Yeah, I’m in the DC area now, but didn’t know a thing about the 5K you’re talking about. Sounds cool, so I’ll check it out. You going? If you’re out there, I’d love to run with you, mate.

            • Andy June 7, 2013, 12:23 pm

              Hey Patrick,
              Couldn’t reply to your post (too many indents I guess), so I’m replying to mine. I think the NYC you were at was the first year and I was there for the second year. I remember seeing clips of the bookstore meeting. We ran laps around Governor’s Island and it was fantastic.
              Definitely check out the Naked Foot 5k, it’s on the 22nd at Seneca Creek and this year they added a Paddleboarding component. I’m pretty psyched, but a little worried because I’m recovering from an ankle injury that has kept me from running lately. Hoping it’ll be better the day of.
              If you make it out, it’d be great to run (or hobble) with you. I’ll wear my red shirt from the NYC barefoot run. It’s got a big white footprint on the front. Should be easy enough to spot.

          • Kristen June 7, 2013, 7:47 am

            Thank you all for the book recommendation. I will check it out. I have seen a few barefoot runners. They tend to have long grey hair with long grey beards or maybe that is just one guy that I see around. It is a higher level of mustachian!? Beardian?

            • frugaltexan June 8, 2013, 9:14 pm


              You might want to check out the website barefootrunners.org and their forum/articles. I haven’t been much of a runner for a few years now, but when I was, I was into the barefoot running and the people who founded the above website were a great help to me (only at that time, on the Runner’s World Barefoot forum.)

              If you change your form/lose the heel strike – you won’t need the fancy shoes anymore. Like the others mentioned though, take it slowly!

          • turboseize June 11, 2013, 3:55 am

            Personally, I don’t buy the “only high-tech shoes will keep you healthy” -hype any more.

            Here’s why:
            Last year, I changed my training routine. I had used the past two years to slowly regain my endurance lost sitting in the office. Having gained an acceptable endurance level, I wanted to improve my general fitness and decided it was time to work on my speed. So I left out most of the slow long distace running and replaced it with sprints and interval training. After a few weeks, I developed severe inflammations in the achilles tendons, nearly crippling me. I attributed that to the change in training routine. Had I overdone it?
            The doctor asked me when the pain occured. I answered about 6 weeks ago and he would not believe me, stating the problem must have developped over years. Ultrasound image showed achilles tendons inflammated and being 150% thick, but half of it being “dead” scar tissue.
            But I did not see the point, yet.

            For about 9 months, I could not run. I also did not dare to take my bike. Then, one day, I wore my running shoes for a whole day at university. At noon, I was nearly crippled by the pain in my tendons. But I had not run, only walked to university (1km) and back and some steps between classrooms.
            Suddenly, something in my head clicked. Could it be that my problem was the expensive, cushioned, stabilizing running shoes?
            One week later, I wore the running shoes again. The pain came back after some hundred meters. Another week later, I started running again – this time with my old, primitive army running shoes ( a design probably from the 60s or 70s) I used to use a decade ago as a cadet. No cushioning, no stabilizing sole, just a profiled rubber sole for grip. After some hundred meters, the pain slowly went away.
            My 140€+ high tech running shoes went to the trash can the very same evening.

            Obviously the “good” shoes were hurting me. I don’t know if it was because they allowed for poor form, or because they “stabilized” me another way than what would have been appropriate for *my* body.

            I still have problems with the achilles tendons, and I can only run relatively short workouts (ca 5km, compared to 8-12 I used to do 2 years ago), but afterwards, it feels better, not worse. I will definitely take it slowly, having a track record of “overdoing” ist after a recovery and then falling back… I will avoid that this time.

            Conclusion: Form ist more important than equipment. Learning good form will do your body much better than any equipment money can buy. Run smooth. Listen to your body.
            And don’t worry to much.

        • Clint June 9, 2013, 7:21 am

          Just one add if you do stick with expensive shoes: they’re not always expensive. I picked up my last pair of $100 running shoes this past fall on clearance for $30.

          • Andy June 9, 2013, 7:32 am

            Great point, Clint. The shoe companies introduce new models every year so they can charge 100+ dollars and convince people that they need to upgrade, but it’s just not the case. The changes year to year in technology and materials are very minor and you can get great deals by just buying the shoe model from the prior year, just like with cars when the new year’s models are coming in. Find a company and model that fits you well and feels comfortable and aim to get that shoe in the older model whenever possible.

  • thepotatohead June 5, 2013, 9:58 pm

    I’m still with the budget, need those numbers staring me in the face currently to make it work. The saving aspect is gratifying for me. It’s awesome to see that bank account go up by not buying things you don’t need.

  • Mindy June 5, 2013, 11:06 pm

    I’m a “long-time listener, first time caller.” This topic dovetails nicely with one of five principles in a new book I’m reading about money and happniess called “Happy Money – The Science of Smarter Spending” (by Elizabeth Dunn and Michael Norton). They call this principle of delayed gratification “Pay Now, Consume Later.” (FYI, the other four princples are “Buy Experiences,” “Make It a Treat,” “Buy Time” and “Invest in Others” – which principles are basically in synch with MMM’s philosophies about money).

    As always (although never previously expressed), THANKS for continuing to help validate and reinforce my attitudes AND behaviors – which have been getting me get step-by-step to where I want to be financially!!

    And I’m enjoying this journey even more – having discovered so many like-minded people in this community you have created – one of the VERY BEST I’ve discovered on the web!

  • 2Frugal June 6, 2013, 2:31 am

    I love the “younger me” idea. It’s something to ponder upon

  • Mrs Stubble June 6, 2013, 3:24 am

    Anytime I feel the icy cold urge to go out and spend some of my hard earned dough I go shopping in my investment account. Somehow adding an additional $100-$1000 to my investments makes me feel like I spent the money in a shopping frenzy, without all the guilt of bringing home crap I don’t need. The fact that helping myself 2x here (not buying crap and building my investment wealth) more then makes up for not coming home with buyer’s regret.

    • Doug June 11, 2013, 8:52 am

      So, have you been scooping up stocks or ETF’s at dirt cheap fire sale prices these days? I have, and that’s my generous allotment of spending.

  • Jen June 6, 2013, 3:43 am

    When I was a teen and wanted to lose weight, calorie-counting and -limiting was the contemporary diet fad. You were supposed to allot yourself a certain daily caloric budget, and stop eating when you reached the upper limit. I trained myself to get as much or more gratification from envisioning a slimmer me, and congratulating myself for my restraint, as I did from indulging in pleasure-based eating. It was a powerfully successful approach to weight loss. Unfortunately it was also a powerfully scary approach to quasi-anorexia…but hey, all analogies have limits.
    Anyway, I never thought about the link between visualizing the future and delaying gratification, but it makes perfect sense and fits with everything and everyone I know.

  • Jason June 6, 2013, 5:21 am

    My problem is that I over analyze what I want to buy because I am bit OCD that way. I end up spending so much time, that I don’t want to buy anything.
    There is enjoyment in the research and I do become better educated on the matter-so there’s some net gain :-)

  • 5inatrailer June 6, 2013, 7:46 am

    Sorry if this has been posted about before in this thread…

    I love how you quantify this feeling MMM. Saving really IS a feeling and the cool part is that it can be trained. My wife and I were DILDOS ( double income, large dog owners) until we had kids (3) and took huge pay cuts (moved jobs to be closer to family)

    After 2 years of forced frugality, I can honestly say my brain thinks differently when it comes to expenses and opportunities for reduced spending- too many examples to list.

    But for us, it basically boiled down to adapt or die. We had no choice. So you basically change all your spending choices to your new situation. Before long, it becomes the normal.

    The challenge is to avoid the other way of adaptation too. Hedonistic.
    I believe that in the long run, we will be richer for our period of forced frugality as it changed our thinking in a way that will hopefully pay off dividends for the rest of our lives- more financial dividends than if I had stayed at the old crappy job, and at a much higher happiness level.

    PS Maybe a MMM post on “Net Family Happiness”??

  • Mr. Frugal Toque June 6, 2013, 7:47 am

    My only issue with this post is the way in which you spelled one of the title words. Maybe it’s an American thing, but I’ve only seen it as “Cha-ching” and “Ch’ching”.
    The way you typed it up there made me think that you were going to help us get rich through observing the behaviour of Scott Baio.
    As I couldn’t remember very much non-Fonz-related lore from Happy Days, I was looking forward to an analysis of the intersection between that and Mustachianism.
    On the other hand, the idea of being able to see yourself in the future and turning out to be a good saver makes a lot of sense. If we can show this to be causal – that we can take a non-saver and turn him or her into a saver – that would be a huge deal.
    All you’d have to do is tear them away from their TV sets.
    I know that was my thing when I was little. Everything was about the future: doing well in school to get to things I really wanted to learn; doing well in University to get a good job; doing well at the job to get a raise.
    I had friends who couldn’t do this – couldn’t complete a trade school diploma even though they already had the knowledge.
    Could we convince that kind of person? The kind who wouldn’t walk a kilometre to take the exam to pass the course his parents were paying for?
    His future was so close, and took so little effort, and he still wouldn’t reach for it. Sometimes I can only shrug, since literally punching people in the face is illegal (apparently).

  • Jacob @ iHeartBudgets June 6, 2013, 11:09 am

    Changing your mindset to enjoy saving is key to growing any amount of wealth. But taken to an extreme can cause a weird sense of pride from not spending money on ANYTHING, and probably annoy everyone around you. I get that America has a spending problem, but if you swing the pendulum too far the other direction, then America is a stingy jerk. Walking the tightrope between extreme saving and spending is required.

    As for budgets, obviously I advocate for them at any stage in life. The idea of guilt-free spending does help serve a purpose, and allow you to enjoy spending money. If you can’t enjoy spending money AT ALL (which I don’t think you are saying), then you are a hoarder, and again, that should not be the goal of financial independence. What is your money for if not to enjoy saving, spending, and giving?

  • Chris June 6, 2013, 1:21 pm

    On the whole, I really like the idea of this article. When friends want to go to bars and I choose to have one cheap-o beer instead of 3 crafts, it’s easy to feel cheap. Next time I order a $2 tallboy, I’ll just think “ChaCHING, one step closer to never working again.”

    I have one beef with this article. In the footnote referring to the NBC article, MMM says this: “Sorry, Mainstream Media, but putting aside money for a great-smelling new car is not saving.. that’s just spending in bigger chunks. Investing money into assets that generate passive income that can meet your needs (including the very occasional car purchase) for a lifetime – that is saving.”

    I can see where he’s coming from on this: we all know that buying a new car is a waste of money when a cheaper used car can be substituted easily. However, I think the habit of saving up for something you think you want is very healthy. It’s easy to say, “Man, I want that $30,000 BMW, I think I’ll buy it tonight!” However, deliberately saving up $200/month (or whatever) for the purpose of buying something you want is totally healthy. It’s a sign that you have a handle on how much you’re spending, and that you’re willing to sacrifice some of your ‘little green minions’ (read: investments) in order to buy something you’ll enjoy every day.

    Example: I’ve been playing piano for years, playing as much as 2 hrs/day in high school. When I moved across the country for my new post-graduation job, I found myself with no piano to play. I saved $140/month for 10 months, building up what I needed to buy myself a brand-new piano while still saving a ton for retirement and maintaining an emergency fund.

    Could I have gotten a cheaper piano? Maybe, but that’s beside the point. I set a goal and saved towards it every day. Without that targeted savings account, I would have never been able to find the spare $1400 to buy a piano (at least not for a decade, at which point I would have missed 10 years of practice).

    As always, there’s a limit to the goodness of targeted saving. If you’re saving up for a new car, a new laptop, and a trip to France all at once, you’re missing the point. My point is: if you have a healthy budget where you’re moving towards retirement at a rate with which you are satisfied, then it’s reasonable to divert some of you spending to a savings account for a future purchase.

  • C. Rodgers June 6, 2013, 1:34 pm

    I’m 25, debt-free, renting for $200/month, driving a paid-off car (long commute), with about $15,000 in tax-sheltered retirement savings.

    Basically, my problem is this. I fumbled around in college for far too long trying to decide what to major in. I finally finished with a bachelor’s in computer science, and I’m now working full-time for decent money. I have my heart set on getting a graduate degree, but the best numbers I can find for projected incomes at different education levels show that by the time I’m forty I would actually have less retirement savings with a master’s or a doctorate than if I just kept working with my bachelor’s.

    What would delayed gratification recommend in this instance? On the one hand, the smart financial move is to keep plugging away, probably even pick up a side job/longer hours, then possibly pursue my interests further after retirement. And that’s fine. Entry-level work is tolerable. But there’s a large part of me that is not satisfied. That part of me wants mastery of a subject, it wants greater latitude in the types of work I can take, and it also wants to feel like I built higher on the foundation my parents gave me. (No one in my immediate or distant family has yet earned a doctorate.)

    As I mentioned, I spent too much time in school and got a late start on my savings. If I were 21, this would be a no-brainer. As it is, I stand to reach 30 with little savings if I go for more schooling.

    Any thoughts for me, Mr. MM? I’m particularly interested in your input because your background is in a field that I’m considering. I understand that computer engineers typically earn a bit more than computer science students. Do you have any comments on the respective advantages/disadvantages of those two career paths?

    Comments from others are much appreciated as well!

    • plam June 6, 2013, 10:33 pm

      C. Rodgers, I have a PhD in computer science and am a professor associated with both computer engineering and software engineering programs. Feel free to email me (address on website) if you have questions.

      A PhD is definitely not worth it financially. I think CS PhDs are great, but because they teach you how to do research, not because they improve your marketability. In other fields, they may reduce your marketability, but you come out about even in CS: there are employers who hire PhDs and can leverage the skills you learned in grad school (for example, Google). Of course, you would typically be making a grad student stipend, not an industry salary, so you probably lose out financially considering the foregone income. As you say, the PhD may lead to more interesting jobs.

      A US master’s will cost a lot more up-front and probably won’t increase your earnings potential by much. However, these degrees are typically not research degrees. They will improve your mastery of the subject: you’ll learn stuff, some of which will be useful (in unexpected ways!) I also don’t think that a master’s is financially a win, but it is a good hobby.

      Keep in mind that you can also gain skills and knowledge in the workplace if you set out to do so. Universities don’t have a monopoly on knowledge. You won’t stay entry-level if you don’t want to.

      As for computer engineers versus computer scientists: in my experience, most computer engineers get software jobs. It doesn’t actually matter much. I think that the stats are reflecting some low-end jobs that “computer scientists” get that computer engineers are less likely to get.

      By the way, reducing the long commute is probably the #1 thing you can do to improve your quality of life at the moment. Mindful spending to me includes spending more on rent if it means that you have more time not commuting.

      • Jasmine June 7, 2013, 1:02 pm

        I think plam above raises interesting points. I just want to add that there are lots of things you can do — all within reach — to improve your career prospects and move beyond an entry-level job, without a Masters.

        Join relevant professional associations and go to meet-ups, workshops and conferences. You’ll have the chance to network with people in your field and broaden your horizons. Consider taking a single course (I’m not from the US so don’t know correct higher ed terminology) from a Masters degree that directly targets a skill you feel is marketable and will help you to get to where you want to go. Start a learning group with colleagues – you could work together on a particular skill or take turns to present short seminars on topics of interest.

        All of these things can go on your CV and will show that you are resourceful, invested in your area of work and take initiative. And the time and money (much less than the cost of a US Masters program) is a worthwhile investment in your future self. Even though FI is a goal, at 25 you’re too young to resign yourself to getting an extra job on the side and waiting to pursue your interests in retirement.

        I’m no expert and am trying to go this route myself after switching to a teaching career after six years in another field. I always saw myself as someone who would do a Masters, but my current situation is not unlike yours: after crunching the numbers, it doesn’t seem like a Masters would necessarily lead to much better job/salary prospects, given my late start.

        You can only go onwards and upwards from here!
        I wish you the best of luck.

    • Joe June 7, 2013, 4:20 pm

      Is it possible that your employer, either current or in the future, can help out with part of the cost of furthering your education? It would seem to me that you’d be a great asset, having interest in the field and wanting to genuinely further yourself.

      Or perhaps what about a certificate in a subfield? Computer security, quality engineering, etc?

    • Optimizer June 8, 2013, 9:30 am

      An interesting point. You seem to be on the road to kick-ass. I’ve just started reading MMM, and one thing I can say now in the final stages of my PhD is that going to graduate school can be rewarding in lots of ways, even though it might not be immediately rewarding financially. Perhaps I can enumerate:

      a) For the Mustachians, one HUGE benefit is that in graduate school you’d be getting a stipend to TA. Otherwise I wouldn’t go. Not only is this nice as it pays for the degree, but it teaches you live on something like $15,000/ year. That is a skill that most people will NEVER have, If you can keep that going for once you have a high-paying job, you can save MASSIVELY.

      b) When you get out, you will have accrued not only knowledge, but also (hopefully) professional contacts and a different view of the world.

      c) I’ve been able to leverage my credentials towards jobs in industry that pay pretty dang well. It gives you more ability to pick and choose an employer from what I can tell.

  • Mark June 6, 2013, 1:53 pm

    Very occasionally I have to use a rental car for work, very often these cars are brand new <800 on the clock. I only rent these for a week max, but I always find something profound happens. My regular drive is a 14 year old car and stepping into a brand new car I am simply blown away. I love it. But only for around 2 to 3 days. By day 3 there are normally at least a few things that start wind me up, the radio doesn’t quite tune to my favourite station, the annoying rattle that I didn’t notice at first, I can’t angle the blower quite right and so on. It dawns on me that I’ve drifted from “woohoo brand new car” to “yeah its alright” in less than a week. I can’t believe this is unique to me, and I have experienced this not just with cars but with other material things.

  • Doug June 6, 2013, 3:37 pm

    Wow, I can relate to this topic. I remember in grade 5 (in 1972) some man showing up at our school and having everyone fill out a survey with questions like: what would you prefer, 50 cents today, or a dollar in a month or one candy bar today or 2 next week and so on. When we filled it out he said: turn the page to the last item, that’s what you will receive, which was 10 cents today or 15 cents in 2 weeks. I chose the 15 cents in 2 weeks (yes, he actually did come back in 2 weeks). I don’t recall the exact breakdown, but recall that more than half the class chose 10 cents today.

    Fast forward to 1987, when the company pension plan where I worked had a surplus and we had a choice to receive a payment of $110 in December or $120 in January. I recall I was the only one of a dozen or so of us who chose the second option. I was asked the question of why I made that choice and said: That’s about 9% more money for waiting only a month. Do the math and that works out to 108% of simple interest and far more for compound interest. They looked at me like I walked in from a different world, or said something quite politically incorrect. That would be understandable if I were talking to uneducated people, but they were all highly educated engineers and technologists! I guess that further proves that most people don’t really get the idea of delayed (but greater) gratification.

  • AndyfromTucson June 7, 2013, 8:43 am

    I make financial (and other) decisions by thinking of myself as two different people, Present Self and Future Self, with Future Self being a loved one whose well being is important to me. When I consider spending on something, I think about how Future Self is going to feel about the purchase a few years from now. Nine times out of ten when I peer into my crystal ball I see Future Self hauling the purchase to Goodwill, or posting it on Craigslist, because the thing never got used much.

  • MoustacheE June 7, 2013, 3:16 pm

    I think I’m starting to get the cha-ching instinct myself! I got introduced to your blog about a month ago and have been pretty much reading it non stop ever since. I’ve always thought of myself as fairly frugal, but I’m nowhere near Moustachian!!
    One of my biggest weaknesses (or “treats” as I justified them to myself) is lattes. However, I recently made a rule that the only time I’m allowed to buy one is if I’m meeting a friend at a cafe, and we actually sit down, drink it out of a porcelain cup and enjoy an hour or so of pleasant conversation.
    It was HARD for a start… it was such an ingrained habit that I had. And it’s not like I even gave up lattes altogether… we have a perfectly good espresso machine at home (which actually makes a better latte than most cafes), and my work has a machine that makes a fairly ok latte (which tastes much better when I think about the $3.50 I just saved myself).
    But now, after a few weeks of “denying” myself, I’ve started to get a small warm & fuzzy feeling each time I recognize an opportunity where normally I would have bought a latte, but instead I chose not to (cha-ching!). And as an extra bonus, by taking the time to make & drink my latte at home before heading to work, I get to to sit with my kids for a bit longer at breakfast.
    So simple, yet so satisfying! Thanks MMM!

  • Debt Blag June 7, 2013, 3:25 pm

    Nice writeup! For me, it’s not just that I delay gratification, it’s that I try to find gratification in a little bit less.

    For example, if I need a $1 million house to be happy, it doesn’t matter *too* much if I buy it now or in 20 years. But if I can learn to be happy with an inexpensive, but comfortable house, then all the better.

  • Vadim June 8, 2013, 12:10 am

    Hi Mr. Money Mustache.

    Have you seen the work/ argument of Sendhil Mullainathan? It is related to some of the ideas in this post.

    His work is outlined in this speech:


    it is a different way of looking at the issues.

  • Mike June 9, 2013, 2:43 pm

    A little off-topic, but the marshmallow experiment has had some interesting followups recently:


    “The robust effect of manipulating the environment, conclude the authors, provides strong evidence that children’s wait times reflect rational decision making about the probability of reward. The results are consistent with other research showing that children are sensitive to uncertainly in future rewards and with population studies showing children with absent fathers prefer more immediate rewards over larger but delayed ones.”

    The relevance for this post is that depending on your background, delaying gratification can be much harder. I’ve seen evidence of this recently while helping a friend whose family lived paycheck to paycheck. Even though they’re now getting a good salary, they’re disinclined to save, even though they understand the big picture.

    Old habits die hard – and seemingly are hard-wired into your brain at a young age!

  • Alex June 12, 2013, 5:24 pm

    What about the opposite of the compulsive spender? I’d consider myself a compulsive saver, and I doubt I’m alone here. I have several investments accounts and funds (perhaps a few too many, but almost all are in sound low cost mutual / index funds). Every week as my automatic investments are made I get that ChaChing! feeling seeing the investments go through. But despite automatic investments which take half my income the checking account continues to grow. So whenever the cash is burning too much of a hole in my pocket I get a hit from deciding which of my accounts I’m going to throw the money at. Maybe one month it’s extra principal at the mortgage, or a random fund, or into Lending Club (not to mention the repeat hits that lending club provides everytime $25 in available cash pops up). All in all it’s like the ChaChing! of savings instead of spending, plus the adrenaline rush I assume must accompany compulsive shopping. Now that I think about it, trading addiction isn’t exactly something new, but thats not what I’m trying to describe, just that this post got me thinking about how the ChaChing! instinct can go beyond the point of not spending all the way to the point of saving / investing.

  • Dillon June 13, 2013, 11:52 am

    I have read that study several times and the one thing I always wonder is, is there a way to change the children? The instant gratifiers. I mean, it is nice to know that people who can delay gratification end up doing better in other areas of their life, but how can we help the ones that are give-me-now!

    I don’t have any children but lots of my friends do and I have seen children cry because they had to wait 5 minutes for something. I wonder if there is way to help them so they stop this pattern now instead of when they are in a ton of debt.

    • savingaway June 24, 2013, 9:36 am

      Dogs can actually be taught delayed gratification. The difficulty lies in explaining that there will be returns. Yes, you can train a dog to leave meat uneaten on the floor while you leave the room or even the house. I have seen it done, although my dogs can’t do this!

      I assume that if a dog can learn it, then you could teach it to a child. But then, I can’t say for sure.

      Also, you have to keep in mind the physical area in the brain that controls logic and reason is not fully developed in children. So, it probably depends on the age of the child as well as their individual development.

  • David June 14, 2013, 12:33 pm

    I really,really, really like his quote about setting aside gifts for our future self:

    “The older I get, the more I realize that the future really does arrive on a regular basis. Gifts set aside by the younger me arrive in my current life, and are much appreciated. By imagining your own future more vibrantly, you too might see fit to give some gifts to your future self. You’ll be thanking yourself sooner than you expect.”

    Right on, Mr. Money Mustache!

  • Shilpan June 15, 2013, 4:23 pm

    Every time you delay gratification, you can always reward yourself by thinking and telling your subconscious that now you are depositing more life-energy and avoiding clutter of possessions.

    Once you do this many times, it forms a habit and becomes a second nature.

    In fact, without doing consciously, your mind will start picking on the motley fools when you see a colleague(who is making same money as you do) but driving a luxury car.

  • Mikhaela Reid September 6, 2013, 9:49 pm

    This post was totally a “ChaChing” moment for me, because I think I’ve been approaching this slightly wrong. I do love budgeting and have been using YNAB, but one of the first ideas I had was — wow, if we slice everything to the bone elsewhere, get rid of all our debts and save a ton for retirement, we’ll finally be able to afford that family camping vacation in Hawaii next year!

    Maybe we’ll just go camping a few hours away by train like we always do… we always have a great time, why do we need to upgrade?

  • Ruth September 7, 2013, 7:42 am

    I love your perspective. I have the same perspective, at least in most matters most of the time. I drink water instead of coffee, tea, or soft drinks. I take brown bag lunch every workday. When I was single, I paid off my townhouse in two years by keeping costs down, getting a second job, taking in roommates, etc. Most of my clothes are from before the turn of the century. I am, however, married to someone who has the opposite perspective. Therefore, I don’t foresee retirement in my future any time soon.

  • Shajenko April 8, 2015, 3:03 pm

    I attribute part of my ability to save and delay gratification to my depression. Basically, those rewards people get from buying things are dulled for me, so it just didn’t seem worth it.

  • Cheri June 23, 2022, 6:21 pm

    I think I am going to start cultivating the ChaChing Instinct for eating as well as spending. As in “I just avoided eating those french fries, and I am healthier for it. ChaChing!”


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