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How To Make A Money Generation: Raising Kids with Positive Money Attitudes

5 min. readbyVexxit StaffonOctober 30, 2020
A five-decade long marshmallow study points to evidence of instilling positive money habits in children. Short of forcing your own kids to spend quarantine staring at marshmallows, how can you inspire them to have good financial habits later in life?

Marshmallows – so powerful. More than just the squishy center of a s’more, marshmallows hold a lofty place in behavioural psychology, thanks to the ‘marshmallow test’ – an experiment that has been repeated around the world for more than six decades.

A single marshmallow is placed in front of a child, typically four to six years old. The child may eat the marshmallow immediately, or wait 15 minutes in order to earn a second treat. One now or two later. Yet as any preschooler will attest, 15 minutes is an eternity at the best of times, let alone mano-a-marshmallow.

According to a Time story in 2011, kids who held out for the second marshmallow were able to distract themselves or mentally reduce the temptation.”For example, they would imagine the marshmallow was a cloud or just a picture of a marshmallow instead of an actual edible treat.”

These little strategies of self-control were not only cute, they were later seen as indicators of greater financial resilience in adulthood.

“At the age of 32 years, children with poor self-control were less financially planful,” observed researchers of a longitudinal study in New Zealand. “Compared with other 32-year-olds, they were less likely to save and had acquired fewer financial building blocks for the future (e.g., home ownership, investment funds, retirement plans). Children with poor self-control were also struggling financially in adulthood. They reported more money-management difficulties and had accumulated more credit problems.”

A similar study at Duke University also found that the immediate marshmallow eaters had trouble delaying gratification even as adults. One participant commented, ‘Believe me, I understand all about saving for retirement, but I haven’t saved any money because when I see a hot motorcycle, I buy it!’”

Short of forcing your own kids to spend quarantine staring at marshmallows, how can you inspire them to have positive money attitudes? It can be especially tricky if they are of the “well-stocked pantry” variety, who, as The Atlantic pointed out in 2018, know “that even if they don’t get the second marshmallow, they can probably count on their parents to take them out for ice cream instead.”

First, try and take the heat out of money conversations at home. A 2013 study found that college students whose parents argued about finances were more likely to have higher levels of credit card debt. Second, teach money management by example, at an age-appropriate level.

“Being honest without oversharing is an important balance,” financial journalist and author Beth Kobliner recently said in an interview with Goop Wellness. Kobliner encourages parents to resist the urge to talk negatively about their pressures, instead emphasizing the family’s spending priorities and the joy that comes from achieving financial goals.

Paying bills online, making economic choices, or even cooking at home rather than ordering take-out - these are all teachable moments that leave an impression, according to Kobliner. “Just involving kids in these basic money conversations and situations can have a positive impact.”

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