December 8, 2015
Instant gratification has become a key part of life for many of todays’ young professionals. The ‘Millennial Generation’, has grown up with rapid changes in technology, and has become accustomed to immediate responses in all aspects of their life. People check their phone without it having rung, and refresh their emails constantly, just to be sure they haven’t missed out on anything. A UMass study has shown that if a video hasn’t loaded after 10 seconds, 50% of people will give up on it. This trend also has an effect on the world of personal finance, where everybody wants things now rather than later. This pursuit of instant gratification has led to less prudent financial decision-making in many of the younger generation.
Levels of household debt have tripled (in real terms) over the past 25 years in Australia, and this is reflective of the “I want it now” state of mind that is becoming prevalent. Many people no longer see the problems associated with over-leveraging to maintain a certain lifestyle or make luxury purchases, which often come at the expense of saving for emergencies or retirement. During tough times such as the GFC, this can come back to hurt people who either had unsustainable levels of debt, or insufficient savings, or a combination of both. All of this has been occurring despite real incomes in Australia constantly reaching new highs.
Changes in work-life balance also have an effect on this large amount of consumption spending. The modern workplace is becoming a more frantic place, with people needing to be available for more hours of the day, and having larger amounts of work on their agenda. As such, there is less time to worry about personal finances and investments. It can be understandable why people spend so much money on things that bring short term pleasure, when you see how busy their days are. This makes the need for some self-rewarding quite understandable, and there is indeed a place for buying things that one enjoys, however one still has to make sure that they are financially responsible.
These facts serve to highlight the sensibility in hiring somebody to help manage your wealth. With our increasingly fast-paced world leaving less time to worry about budgeting and spending, let alone investment decisions, an astute financial advisor can do all of this for you.
Hiring a financial advisor puts you in the best position to be making sensible financial decisions, because at the end of the day, a balance is needed between spending now and saving for later. As long as you aren’t spending too much on short term pleasures, there is nothing wrong with buying things that you enjoy. After all, money isn’t really worth anything until you spend it.
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