The Financial Page
|Take the Marshmallow Test
By Keith Rawlinson
Volunteer Budget Counselor
Which would you choose?
(A) Receive one marshmallow right now.
(B) Wait, and receive three marshmallows twenty minutes from now.
a formal study, this question was posed to a group of four-year-olds.
Some chose to have the one marshmallow immediately, and some
chose to wait twenty minutes to receive three marshmallows. Then,
the two groups of four-year-olds were tracked for the next twenty years
of their lives. During those twenty years, with little or no
deviation, the group of four-year-olds that chose to wait for twenty
minutes, excelled significantly beyond the other group in most aspects of their lives.
What can we adults learn from this?
study, as I am sure you have already surmised, was about comparing
people who choose immediate gratification to people who are willing to
delay gratification in order to have more later. In other words:
patience versus impatience; or, maturity versus immaturity.
the willingness to delay gratification in order to be better off later
is a sign of maturity. The willingness to delay gratification is
also a very good indicator of future success in life--especially when
it comes to finances. I can honestly say that, in my years of
financial counseling, I have never
seen an adult who insists on immediate, short-term gratification,
become debt free or wealthy and then manage to stay that way. In
fact, when I am called to counsel new clients, I can often accurately predict
their chances of financial success by looking at their willingness to
delay gratification. Now, what I do
see occasionally, are adults who start out immature and wanting
immediate gratification, but through learning, determination, and
sometimes fear, become more mature and develop the ability to delay
gratification in order to be far better off somewhere down the road.
may say you would choose to wait twenty minutes for three marshmallows
instead of getting one now, but would you really? In fact, is
that what you are doing in your life right now as an adult? Believe it or not,
we adults are taking the marshmallow test on pretty much a daily basis.
Here are some examples:
I wait until I have saved up the cash for something I want, or should I
just go ahead and put it on the credit card and worry about paying for
I spend time and money getting an education in order to increase my
earning potential, or should I just take the job offer and start making
I spend a few years saving up a nice down payment for a house, or
should I just borrow as much as the bank will let me so I can have the
I deny myself some of the things I want now in order to have extra
money to save and invest for the future, or should I spend my
money to buy the things I want right now?
-Should I save up money for the purchase of my next car, or just borrow the money to buy the car now?
-Should I drive an old car now in order to save up the money for a nice one later, or just lease or finance a nice car now?
I put fun, enjoyment and convenience on hold while I work on becoming debt free so
that I can live debt free for the rest of my life, or should I just
deal with debt as I go along the way most people do?
As you can
see from just these few examples, we adults are constantly taking the
marshmallow test. The future success of the four-year-olds in the
study was indicated by their willingness, or unwillingness, to delay
gratification in order to get ahead. The lesson here is that if
we adults want to get ahead financially, we must
be willing to put off gratification in order to be better off
later. The steps to getting ahead are (in order): creating a
written plan, living on less than you earn, establishing savings for
emergencies, getting out of debt, investing for the future.
All of these things require time and
delayed gratification. Borrowing money to buy things you
don't absolutely need for survival, or to buy things that are bigger,
better, or nicer than you really need, is one very common example of
insisting upon immediate gratification in your life. The reason
you borrow money, including using the credit card, is so that you don't
have to wait for whatever it is you are buying. In order to get
out of debt and hopefully one day become wealthy, you have to start
thinking like a wealthy person and look at the longterm instead of at
the immediate. You have to be willing to deny yourself things for
now in order to get to the point that you have the cash for things you
want so you will never have to live that way again. You have to
learn to use that magical word "no."
No, I will not keep using my credit card to buy things I don't really need.
No, I will not insist on spending my money on fun or on 'stuff' while I'm working on getting out of debt.
No, I will not be too lazy to develop a written budget and then follow it.
No, I will not buy a nicer car than I can afford--I will buy a nice car later when I can afford it.
No, I will not buy a nice, big, impressive house until I can actually afford one--I can always buy a nicer house later.
I will not let my friends, family, children or spouse talk me into buying
unnecessary things--I'll wait until I am out of debt to start making
frivolous or fun purchases.
You are taking the marshmallow test right this very moment!
have read this article and now have to decide: Do you want
one marshmallow right now, or are you willing to wait until you can
have a whole bunch more marshmallows later?
If you insist on having your one marshmallow now, then just:
- Stay in debt.
- Keep borrowing money for nice cars.
- Keep using your credit card so that you can have 'stuff' now instead of waiting.
- Use debt to deal with financial emergencies instead of building up emergency savings.
- Keep living paycheck-to-paycheck.
- Keep struggling financially for the rest of your life.
If you are willing to wait, in order to have more marshmallows later, then:
- Develop a written budget and live by it.
- Get $1,000 in the bank for emergency savings.
- Work on doing a debt ladder until you are debt free except the mortgage.
- Once debt free, build your savings up to three to six months worth of income.
- Then use the money you were paying on debt; to have fun, to buy nice things, to save, to invest and to become wealthy.
- Be willing to endure for the several years it might take to accomplish these things.
now on, each and every time you are faced with any kind of marshmallow
test, remember what you have learned here on Eclecticsite.com's
Financial Page and make the wise, mature choice.
Please know that all of the thoughts, information,
and techniques given on this site are nothing more than the author's
the matter being addressed. Do further research before making
This article copyright
© 2008 by Keith C. Rawlinson
(Eclecticsite.com). All rights reserved.
This article may be
copied for non-profit use including newsletters, bulletins, etc.
as long as you
first get written permission from the author and full credit is given
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