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Just Say No!

The Power of Delayed Gratification

Have you heard of the Marshmallow Test? If you haven’t, here’s a great video to familiarize yourself with the experiment. By the way, if you’re looking for some free entertainment, feel free to replicate this test at home!

The rules of the test are simple:

1. You sit a young child down in a room by themselves and place a marshmallow on the table in front of them.

2. You instruct the child that you are going to leave the room for a few minutes

3. They have two choices: they can eat the marshmallow in front of them, or they can wait until you come back at which time you will give them two marshmallows

Simple right? Well, the results can be quite hilarious as our video proves.

Some kids seem unbothered by the delay, some succumb to the temptation immediately, and some seem absolutely tortured by every second of the adult’s absence!

The original hypothesis of the test was that children who were able to wait for the second marshmallow would prove to be more successful in life because of their ability to delay gratification. Conversely, children who did not wait would be more likely to struggle later on because of their weak willpower. The predictive ability of this “test” is very much in question. It is, however, an interesting window into a struggle we all face whether we are 5 years old or 50.

Back in the 1980s, First Lady Nancy Reagan popularized the slogan “Just Say No” as a response to the growing drug epidemic in America. The message was clear: Stand up to peer pressure! Refuse the temptation! Just say no!

The limitation, however, with a slogan like “Just Say No!” is that it focuses solely on the negative: don’t do drugs. That may be a powerful enough deterrent for some, but it lacks a specified benefit.

Now listen, I get it. “Just say no because your life will be more wholesome, clear, and fulfilling without the addictive mind-altering influence of dangerous drugs!” is not very catchy and doesn’t fit on a bumper sticker. As Shakespeare famously penned, “Brevity is the soul of wit”.

The slogan may lack in nuance, but it is memorable.

Now what does all this have to do with your finances? Well, every day we are presented with “marshmallow tests”. These are decisions that force us to choose between embracing immediate pleasure or opting for delayed gratification:

Do I add these new shoes to my Amazon shopping cart or work on building up my emergency fund?

Do I take the family out to eat or put more on the credit card payment this month?

Do we stretch the budget and buy the four-bedroom home or contribute more to the 401k so we can retire earlier?

Do we upgrade to a newer model car or save for our anniversary trip in two years?

While it’s cute to see little children squirm in their seats as they agonize over the opportunity cost of a single marshmallow, there’s nothing entertaining about wrestling with the decisions listed above.

Perhaps you’ve tried taking Nancy’s word of wisdom to heart: Just say no! Every time you feel tempted to spend money, you begin the same process of financial self-flagellation. “No, I can’t eat out! I can’t buy new clothes! I can’t have a new car! I can’t have fun! No, no, no!”

This approach may work for you, but it’s missing a key component. Saying “NO” to this allows you to say “YES” to something else. So instead of focusing on what you’re saying “NO” to, decide to focus on the more important thing you want to say “YES” to.

The kids who passed the marshmallow test said “NO” to one marshmallow because they wanted to say “YES” to two marshmallows. When you recognize the greater value of a future reward it allows you to stay disciplined in the moment.

Say “NO” to a mortgage payment that’s beyond your reach because you want to say “YES” to a better house that you’ve saved up for.

Say “NO” to the expensive cable bundle right now so that you can say “YES” to a family get-away next year.

Say “NO” to having a new iPhone right now so that you can say “YES” to having your credit card bills completely paid off.

Financial discipline is not about all the things you can’t do now. It’s about the power of delayed gratification so that you can say “YES” to better things farther down the road!

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