by Mathew Green, mycents     'I want it now' is something we probably hear all too frequently from our kids.  In today's society of immediate gratification and materialism, it can be difficult to teach our kids that sometimes we have to wait to get things we want.  Educator, Mathew Green, shares three lessons to help families impart financial discipline to their children.

The other day and I heard about a study that was conducted by Michael Mischel – a psychology researcher at Stanford University. The study demonstrated the importance of ‘delayed gratification’ or self-discipline, and its role in role in long-term success. Mischel defines self-discipline as ‘the ability to delay immediate gratification in exchange for long-term success.’

In this brilliant and confronting experiment he offered hungry four-year olds marshmallows and left them alone in a room. He told the youngsters that he would return in a few moments and if they could resist eating the marshmallow they would receive some more. Not surprisingly, most of the youngsters were unable to resist the temptation and ate the marshmallow as soon as they were left alone. A few managed to resist for a short time but then ate them, and some were able to control themselves and received their promised reward. The children were interviewed many years later with startling results.

As Mischel suggests: 

The differences between the two groups were dramatic: the resisters were more positive, self-motivating, persistent in the face of difficulties, and able to delay gratification in pursuit of their goals. They had the habits of successful people which resulted in more successful marriages, higher incomes, greater career satisfaction, better health, and more fulfilling lives than most of the population.

 

Those having grabbed the marshmallow were more troubled, stubborn and indecisive, mistrustful, less self-confident, and still could not put off gratification. They had trouble subordinating immediate impulses to achieve long-range goals. When it was time to study for the big test, they tended to get distracted into doing activities that brought instant gratification. This impulse followed them throughout their lives and resulted in unsuccessful marriages, low job satisfaction and income, bad health, and frustrating lives.

I see financial management as a type of ‘delayed gratification.’ You often don’t see the results of your decisions immediately; they take time to come to the surface. The decisions you make today will shape your future. Spending money is a type of ‘instant gratification’ – it makes you feel better (for a short while), kind of like an anaesthetic. The problem is most people fail to develop a long term perspective with their finances, the fail to understand how their decisions today will influence their tomorrow.

I have decided to train for the Sydney Marathon, probably the most challenging thing I have ever done. I have decided to sacrifice my time, energy and feelings (especially at 5am on a freezing winter’s morning) and delay my gratification. I know, well I hope, that the countless hours of sacrifice will be worth in when I cross that finish line.
 

My wife and I have decided to sacrifice that family holiday and that new car and for a new house that we are saving for. We know that one day, one day in the very distant future, it will be worth it. I am not saying become stingy and tight with your money, but what I am suggesting is that you need to develop the discipline of delaying some things and focusing on your financial goals.
 

As a parent, you can do a number of things to help your children appreciate the importance of delayed gratification: 
 

Lesson #1: Things require time
 
We live in a world where everything is instant. We can go online and talk to people anywhere in the world, we can order a take away pizza that is delivered to our house within half an hour and we get frustrated if we have to wait at the checkout for a few minutes. Things like character and financial integrity take time to develop.
 
Lesson #2 The power of earning
 
It’s funny, you seem to look after things better when you pay for them. When I first got my driver’s licences my father used to let me use the car. To be honest, when I had driven round the corner and when I was out on sight I used to give that accelerator a little ‘push.’ I used to leave take away food wrappers on the floor and the petrol was always left empty. I am not particularly proud of how left the car, but I learnt a valuable lesson. When I purchased my first car (it was a speedy Ford Festiva), I made sure that I looked after it – for a while. My point here is that when you purchase something with your own money, your own hard earned cash, you tend to look after it better. As a parent, you can teach your children these principles.
 
Lesson #3 “You are the example”
 
I am not a parent, but I am a primary school teacher. One day, while I was teaching a lesson to a Year 2 class, I heard one of my students say the word ‘awesome.’ The word sounded familiar. The day before I was having a casual conversation with a colleague and I had been describing my experience on my first class. I was amazed, and slightly shocked that one of my students had heard me say it and then used the word in one of their own sentences. As a parent, don’t ever forget the example that you are to your children. It’s a little hard hitting, but your children will copy, or at least be influenced by, what you do and say. In terms of your finances, it is important to know that your children are watching you. Habits, and in particular financial habits, are learnt and engraved at a young age."

About the author: 

Mathew Green is a primary school teacher who runs mycents, an online financial literacy resource, encouraging young people to make sound and educated financial decisions.  Link: mycents

Register now to join YourKidsEd for e-updates with new feature articles, links, and inspiring ideas to educate and enrich your kids! It's FREE!!