Marshmallows are freakin’ irresistible. So are YouTube videos. Combine the two, lock a few six-year-olds in a room with a one-way mirror, and you’ve got comedy gold. Check out the video below to see these poor kids sitting in front of the ultimate temptation: an unguarded marshmallow.
It’s an easy pass/fail test: if you can sit in a chair and wait for 20 minutes before eating a marshmallow that’s placed in front of you, you’ll be rewarded for your patience with a second marshmallow. Alternatively, you can give into your urges and eat the one marshmallow on the table right now.
Forbidden marshmallows make for a hilarious video (I love the kid at the end who slaps himself in the face). But what does this have to do with personal finance? Plenty, actually.
The researchers of the original “Marshmallow Test” studied the relationship between a person’s ability to resist temptation (like a marshmallow) and a person’s future success. They followed the lives of the six-year-olds from marshmallow study and found an incredible connection: the kids that were able to wait to eat the marshmallow were better adjusted adults and scored an average of 210 points higher on the SAT. (Click here to tweet about it!)
Marshmallows and Money
The Marshmallow Test is a classic example of delayed gratification or, more bluntly, “can you wait for something you want?” Some people are better than others at exercising patience for something they want. I am not one of those people. I am not patient, and I certainly would not wait twenty minutes to eat if the food was already sitting in front of me (substitute the marshmallow for a piece of dark chocolate, and you wouldn’t even know it was on the table). If adults struggle with delayed gratification, it’s a down-right cruel test for a six-year-old. But as you saw in the video, some kids can exercise incredible restraint. Those same kids are the ones that do better in school and lead more well-adjusted lives.
Being able to wait for something you want has implications beyond the classroom. A kid that develops the ability to focus on the long-term is more likely to exercise patience in other areas of his life, including finances. If you can wait for that second marshmallow, you can certainly wait to buy a new car, avoid an impulse purchase at the mall, and even start saving for the future. Patient kids are more likely to become financially patient and responsible adults.
Are some people born with more patience and the ability to wait for what they want? Probably. But delayed gratification can be learned. Patience is a skill, and it can be taught and cultivated with the right lessons and a little practice.
Making it Worth the Wait
So how do you raise a child that’s willing to wait for her reward and will think about money in the long-term?
1. Don’t delay gratification too much.
Imagine yourself as a child. It’s your birthday, and you just got a $100 bill from Grandma and Grandpa. You’ve never seen this much money all at once in your life. Just when your imagination starts to run wild with possibilities, your parents pluck the cash from your hands. “Half of this is going into a savings account for college,” they tell you. “You’ll thank us later.” This is not the way to teach a kid about long-term savings.
Encouraging your child to save for college is an admirable gesture, but forcing your child to save money is not going to teach him anything about waiting for something he wants. Besides, college is too far away. Remember the kids who waited for the second marshmallow? They knew they’d get another one in 20 minutes. They could see the finish line, and they knew they’d be rewarded if they exercised a finite amount of patience. For a child, college might as well be a hundred years away – and $50 of that birthday money will never be seen again. Finding the appropriate long-term savings goal for your kid takes some practice and experimentation. There’s a happy medium between waiting 20 minutes to eat a snack and waiting 12 years to go to college.
2. Practice in front of your kids.
Whether you like it or not, your kids will learn a lot about managing money by observing (and mimicking) your financial habits. Baring this in mind, you have a lot of power to help your child develop financial patience by exercising financial restraint yourself.
The next time you’re shopping with your family and something catches your eye (for example, a new pair of jeans that’s not on your shopping list and not in your budget), talk about it out loud and with your kids.
- “Can I wait to buy these?”
- “Do I really need them?”
- “Am I going to save up my money instead and buy them later?”
Money is all about choices, and kids have the chance to learn about making smart financial decisions by watching how you handle yourself in an impulse-purchase situation. Besides, by talking about your purchases out loud, I bet you’ll avoid buying that shirt you don’t really need and save yourself a little extra money
3. Use the right incentives.
Delayed gratification only works if it is indeed worth the wait. Can you offer your child any incentives that would encourage him to save for the long-term (or at least encourage him to avoid the impulse to spend all of his money today)? It’s a lot easier to encourage your kid save money if he can see the tangible benefits.
One option is to match the money that your kids saves for specific, long-term goals. She’ll reap the financial benefits of saving her money and develop a habit of putting money away for the future. You don’t have to match dollar-for-dollar, if that’s out of your budget; even fifty cents is decent incentive to make savings worth while.
When to Eat the Marshmallow
Sure, if your kid says no to a marshmallow now, she’ll do better in school and grow up to be a money-savvy adult. If your kid think about the future instead of the present, she might have thousands of dollars saved up by the time she goes off to college.
But you know what? Sometimes it’s okay to give in and just eat the marshmallow, because…well, it’s a marshmallow. It’s sitting in front of you. It’s delicious. And if you’re a six-year-old, you shouldn’t have to wait until you’re older to enjoy everything.