…Is a Key to Financial Success
Teaching children about delayed gratification is one of the pillars of lifelong financial success. People that can delay gratification are more successful in their chosen careers, relationships, finances and all areas of life.
The Stanford marshmallow experiment was a series of studies on delayed gratification in the late 1960s and early 1970s led by psychologist Walter Mischel, then a professor at Stanford University.
In these studies, a child was offered a choice between one small reward (a marshmallow) provided immediately or two small rewards (i.e., two marshmallows) if they waited for a short period, approximately 15 minutes, during which the tester left the room and then returned.
In follow-up studies, the researchers found that children who were able to wait longer for the preferred rewards tended to have better life outcomes, as measured by SAT scores, educational attainment, body mass index (BMI), and other life measures.
Should You Spend or Save Today?
Making this decision is the crux of delayed gratification. Should we buy what we want today, or hold off and buy it in a few months or years time? Well, there is no easy answer.
However, if you hold off from spending your cash today, you’ll be able to buy a bigger or better version next year. Of course, there are times when you really need to buy today and waiting until next year will be silly.
An example of this is when your car breaks down and you need it to get to work. Not getting a new car could mean losing your job and income. Compare this to buying a new car, because you think your current car is out-dated.
You’d be better off saving your money and waiting until you really need to make the purchase instead of splurging your cash today. Teaching children the importance of delaying certain purchases can be very powerful later in life.
How to Teach Delayed Gratification
Here are our tips to guide your lessons:
Tip #1 – Know What to Value
Learning the difference between a want and a must have, is the most important lesson in learning which purchases we should delay and which we shouldn’t.
Tip #2 – Clear Goals
Knowing where we want to get to and what we want to achieve will help direct where we spend our money. Having clear goals is a constant reminder to think carefully before spending our cash.
Tip #3 – Create a Plan
Having a budget in place that shows you what you need to earn and how much you’ll need to save to achieve your goals, can be very motivating.
Tip #4 – Define Your Priorities
Knowing what is important to you and what you want to achieve will help you prioritize your buying decisions and stick to your budgeting plan.
Tip #5 – Reward Yourself
Always delaying things you want can be very taxing, so sometimes it’s ok to have a day off and reward yourself for all your hard work. Just make sure you don’t go overboard, otherwise, all your hard work will be lost.
If you want to find out more about teaching your children to treat money with respect, then check out Fran Christie’s new book “101 Money Tips for Kids and Parents” here
