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Do Your Kids Pass the Marshmallow Test?

Delayed gratification can be a tricky thing to learn at any age, but teaching good money habits to your kids now will do wonders in their future financial lives.

Think about your money habits and where you initially got them! You’ll discover that your parents or guardians influenced how you looked after your money.

Isn’t it time to pass on the good you’ve learned about money to your kids? If you believe so,  join me as I share how you can do so.

Teaching kids about money

How Instant Gratification Costs Them

We live in a world where we want rewards now, even if we could receive better ones in the future. This was predicted more than 50 years ago by Stanford University researchers.

The researchers conducted a series of tests called the Marshmallow Experiment to determine the impact of delayed gratification. Unsurprisingly, they discovered that delayed gratification leads to productive behaviors in many aspects of life.

As you probably know, money management demands the ability to delay gratification. If you can help your kids develop this ability early on in their lives, they’ll take care of their financial futures. Here’s a key strategy you can employ right now.

Show your kids the power of prioritizing. In a fun way, let your kids set small financial goals, such as saving for a cheaper toy. It’s helpful if you can add an incentive you’ll include if the child achieves their goal.

For instance, if they want to save for a doll, you can offer them an extra toy if they reach their goal. Tell them that if they don’t wait until they reach their goal, they won’t get the extra toy.

How Much Necessities Cost

Kids don’t know how much things cost, including necessities. This is particularly prevalent in this day and age of plastic money. It’s not hard to understand why even adults struggle with this.

Only about a third of U.S. households create monthly budgets. How would the remaining two-thirds know how much they spend on necessities?

Your kids could be among the households that know where their monthly incomes go. Begin now to teach them how much necessities cost.

One powerful strategy is to withdraw a certain amount of money from the bank, say $500. Sit with your child and show them how you’re going to spend that money. For example, you could distribute that money on buying items such as bread, rice, tomatoes, and soda.

It’s a good idea to create your plan on a piece of paper or spreadsheet.

Then, go with them to the store and purchase the items you planned to buy. When you come back home, review the receipt with them. Doing this is an excellent way to teach financial literacy to your kids.

The Power of Saving

A survey of U.S. college students about to graduate made an astonishing discovery: Nearly half of them either don’t have a savings account or they have zero dollars in them. These students don’t have the habit of saving money.

They grew up without the saving habit or lost it over time. If your kids can learn to save while they’re young, the saving habit may stay with them for longer. It’s up to you to lay the right saving foundation.

One approach is to get them to save a fraction of their allowances or income into a clear jar. The savings should be geared toward a financial goal. If they have multiple goals, give them one jar for each of the goals.

Meanwhile, show them what you have achieved by saving money. For instance, you could take them through how you saved for your mortgage down payment. It’s even better if you can play a saving game with them; you save for your goals, and they do the same to achieve theirs.


Your child’s money habits can make or break their future financial life. You can set the proper foundation by showing them the cost of instant gratification, how much things cost, and the power of saving.

Go ahead and build that foundation now before they learn bad money habits!


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