I’m a mom of two young boys. Joshua is six and loves playing by the rules. He does not handle change very well. His shoelaces always have to be tied evenly (and I mean to the inch!) and he does fairly well with delaying gratification and with being patient.

Daniel, age 4, is our “creative” type. I’m sure many of you moms are already smiling inside. Rules are always meant to be broken, change is where he thrives, his imagination is always at work, and patience is his Achilles’ heel.

So, when it came time for my husband and me to start training our boys in sound “financial doctrine,” I started doing some research on how to handle such different personalities while helping instill in them solid financial wisdom.

While doing my research I stumbled upon on a test performed in the 1960s by Stanford University. It was a very simple test and consisted of one marshmallow and one four-year-old, placed together in a quiet room.

The test administrator would hand one fluffy marshmallow to the child saying: “Susie (or Johnny), you can eat this marshmallow now, or you can wait till I come back, and if you still have not eaten your marshmallow, I’ll give you another one.” Easy!  Eat one NOW or wait and get two LATER! Parents of each of the 600 plus children who were tested watched in anticipation, wondering what choice their darling would make.

As you would imagine, most children devoured their marshmallows almost immediately (within 30 seconds – 3 minutes). Only 30% of those tested had enough will power to wait.

What I found most fascinating about the Stanford University test is not that most of the four-year-olds ate their marshmallows. It’s what happened to each of those two groups of children later in life.

Stanford followed each of the tested children into adulthood to see how their decision to delay gratification would impact them later in life. The results were stunning. Those who were in the 30% – able to wait – preformed much better academically. They were also able to relate better to their peers, had higher capacity to plan and think ahead, and were more effective at coping with problems.

As an adult who has been applying solid financial principles for many years, I fully understand the benefits of waiting. My husband and I are enjoying the rewards of applying “pay now, play later” advice we received from our pastor long ago. But how can I teach my little guys to follow these principles if they are not naturally “wired” that way, especially my creative one?  

I finally came to a simple conclusion that actually had everything to do with my husband and me and very little with how our boys are wired.

Our children observe us constantly. They behave the way we behave and not necessarily the way we “tell” them to behave. They watch how we spend, they watch how we give and they hear our arguments over money. It’s unreasonable to expect our young ones to learn anything we ourselves are not living out through our daily choices. So, changes had to start with us first.

Here are four practical ways you can help your children mature into wise and financially responsible adults. As you’ll see, these are also things you need to practice!

  • First things first. Generosity is one of the best ways to gain a proper and balanced attitude towards money. Honoring God with first fruits, not just as a habit, but also as a way of showing gratitude, will help your children understand that all things come from God. So every time they earn an allowance teach them to set aside a portion for the Lord. Maybe there is a special project in your church they would enjoy giving to, or a family in need?
     
  • Let them earn it. Teaching children, even as young as four to six years old, to work for their allowance is a great way to teach them a good work ethic and to have an appreciation for the money they’ve earned. Access to “easy money” may prevent them from learning this valuable lesson. We chose to teach our boys that certain responsibilities like cleaning their room, making their beds and clearing dishes from the table after dinner are just part daily life. If they want to earn money there are specific jobs outside of the regular “life routine” they can do. Create your own “job” list, name the price for each job and let them enjoy earning the money.
     
  • Teach them to save. This is your opportunity to help them learn delayed gratification. Label three jars as Give, Save, Spend. Every time allowance is earned or birthday money is received, teach them to save a portion of that income. Savings can be used to purchase bigger items they really want but require a much larger sum of money. It can also be used for teaching investment principles.
     
  • Let them decide. This is a hard one—allowing your children to make decisions with their earned money. This is only half the battle. You must also allow them to experience the consequences of bad financial decisions. No bailouts allowed! If your child wants to spend their money on a silly toy just because they have to have something now, let them, but also teach them that the toy they really wanted can’t be bought until they save for it. This is the only way to help them understand that in life we make choices, and those choices have real consequences.  

Self-control is a daily battle, but it can be won, if you are consistent. The key is to recognize early on your child’s natural tendencies. Do the “marshmallow” test with your children at home. Use the results to train up “two marshmallow” kids who in turn will become “two marshmallow” adults. Imagine how different our nation would look today if all of us lived out the principle of delayed gratification.

Megan is one of the new additions to the Finicity (provider of Mvelopes and Money4Life Coaching) team. She comes with over 13 years of experience in the Biblical Finances area. Her content has been published by Money Matters, Do Well and Lifeway's More than Living. She is a mom of two young boys, and lives with her husband David in the Atlanta area.

Publication date: May 8, 2013