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One marshmallow now, or two later — you decide

July 29, 2012

It would be tough to resist this at 35, how could I do it at age 5?

Walter Mischel, Stanford University professor, conducted a famous experiment in 1972 with marshmallows. He took children ages 4 to 6 and made them a deal. They could have one marshmallow now, or wait 15 minutes and have a second marshmallow.

This study has become one of the best behavioral studies on delayed gratification. In followup studies, the individuals who were able to hold off for the 15 minutes were measured to be more competent and scored higher on the SAT.

Being able to delay gratification is one of the major characteristics that shows maturity, especially in relation to how people handle their money. Many individuals get older, but don’t develop more maturity in this regard.

We have become a society of instant gratification. With the technology we possess, we can buy almost anything online and have it the next day. With our smart phones, we can access anyone or any information in a matter of seconds. With credit, we can buy what we want now and pay for it later.

We have become a society of entitlement as well, especially the younger generation. It is easy to tell ourselves it is O.K. to buy that extra treat because we deserve it.

People see what everyone else on TV has and buy it because, ‘everyone else has it.’ Many believe needs aren’t just food and shelter, but also includes the latest smart phone or TIVO capabilities on our TVs.

How has this turned out for us? Not very well. Let’s look at the statistics:

  • One in every 10 Americans with a mortgage reports being late or missing a mortgage payment during the past year.
  • 7% of adults are either getting calls from collectors or seriously considering filing for bankruptcy.
  • Only 59% of the young adults in Generation Y (ages18-29) pay their bills on time every month.
  • More than a third of adults say they do not have any non-retirement savings. And though a majority are currently saving for their retirement, more than a quarter are not.
  • 31% of college students polled do not worry about debt, believing that they can pay it back once they are out of school and earning a regular paycheck.
  • More than 25% of college students think it is reasonable to run up a debt to splurge on a special celebration with friends at a restaurant or to use a credit card as a way to raise cash.
  • An average of 23% of college students choose to ignore overdraft penalties and the prospect of months or years of paying off a debt incurred for a moment of fun.

We are failing an entire generation by not teaching our children to delay gratification. What do I think is the best way to teach our kids? It is simple: lead by example.

When there is something you want, but don’t have the money for, don’t pull out your plastic; hold off on the purchase. While doing this, explain to your children that it is something you really want, but you are going to save and budget for it. We learn more from what we see than what we read or hear. If you set a good precedent, it will be easier to teach these good habits to your children.

Every day we face our own marshmallows. We make a choice to eat one now or wait to have two later. Whether it is something you are saving for or retirement, by waiting you will be able to enjoy more down the road.

We have done poorly in this aspect as a society, but for you, all it takes is one good decision followed by another. When you have that next temptation, think about delayed gratification and hold off to provide for a better future for you and your family for generations to come.

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