In fact, most of the time you should eat the marshmallow. I am referring, of course, to the famous marshmallow test conducted by psychologist Walter Mischel in which he gave young children marshmallows and told them if they waited 15 minutes to eat them he would give them another one. Follow-up studies showed that the children who had enough self-control to wait fared better later in life.
Substitute money for marshmallows and years for minutes and the marshmallow test becomes a close approximation for saving and investing for the future you. Therefore, telling you to eat most of your marshmallows now might sound like strange advice for a personal finance blog. However, saving all your marshmallows for some future day will do nothing more than turn you into a miserable Scrooge-like character. Balance is the key.
Mischel, who has spent much of his life studying and promoting the benefits of self-control, recognizes the importance of achieving this balance. In his excellent book The Marshmallow Test: Why Self-Control is the Engine of Success, he said “A life lived with too much delay of gratification can be as sad as one lived without enough of it. The biggest challenge for all of us…may be to figure out when to wait for more marshmallows and when to…enjoy them. But unless we learn to develop the ability to wait, we don’t have that choice.”
In other words, success and happiness in life entails developing the ability to delay gratification and then using this ability to achieve a delicate balance between living a full and meaningful life today and saving enough to provide opportunities for your future self.
Time and Money
I love the book The Time Paradox, by Philip Zimbardo and John Boyd. The time paradox, as explained in the book, is that “Your attitudes toward time have a profound impact on your life and your world, yet you seldom recognize it….”
Zimbardo and Boyd identify five unique time perspectives as follows:
- Past-Positive: The past is important to you and you have mostly positive feelings about it.
- Past-Negative: The past is important to you and you have mostly negative feelings about it.
- Present-Hedonistic: “Eat, drink, and be merry, for tomorrow we die.”
- Present-Fatalistic: Nothing I do matters anyway, so why even try.
- Future: You have goals and big plans for the future.
All of us are made up of a combination of each of these time perspectives in varying amounts. Zimbardo and Boyd recommend avoiding, to the extent possible, two of the time perspectives. They write, “The ideal time perspective is low on past-negative and present-fatalistic time perspectives. Our research suggests nothing good comes out of them. New research makes evident that time-perspective biases emphasizing a negative past or fatalistic present put people at risk for both mental and physical illness.”
The other three time perspectives each have both positive and negative aspects. Zimbardo and Boyd describe each of the perspectives as they relate to money:
- Pasts and Money: “Pasts are less concerned with enjoying today or saving for tomorrow. They are more interested in preserving money they made in the past. Promises of high-investment returns hold little allure for them. They tend to have little debt, and when they do, they repay it promptly. They learn from the past and thereby hope to avoid repeating their mistakes….they are comfortable with the present and desire the future to be no better than the past. Most of all, they want to ensure that the present and future are no worse than the past.”
- Present-Hedonistics and Money: “A present-hedonistic motto is ‘if it feels good, buy it!’ Their enthusiasm for living is expensive, and it gets in the way of boring activities like paying bills. As a result, people high in present hedonism often get stuck paying for a thing twice. They pay for it the first time, and then pay for it again in credit card interest and late fees.”
- Futures and Money: “Futures balance their checkbooks more often than [other] people…. They pay their bills on time, have savings accounts, and carefully consider their investments. For them, time and money denote possibilities for the future, which may provide things that they did not have yesterday and probably would not have today. Time and money are forces that can bring them things to have and do.”
Zimbardo and Boyd conclude that happiness and wise money-management require a balance between the three time perspectives described above. They write, “Clearly a balanced time perspective that combines elements of past-positive, present-hedonism, and future time perspectives will allow people to learn from the past, enjoy the present, and plan for the future.”
Have You Achieved this Balance?
In conjunction with the book Zimbardo and Boyd have a website where you can take a short survey to determine your personal time perspective profile. The survey only takes a few minutes and provides valuable insight into how you view time and how this might affect how you handle your money. I highly recommend it.
As you might expect from someone who writes a personal finance blog I scored high in the future time perspective but low in the present-hedonistic. I could improve my happiness by enjoying the present more and not worrying so much about the future. I need to eat more marshmallows now. I have known this for a while but seeing it in black and white provided a wake-up call.
What is your time perspective profile? Do you need to save more marshmallows or eat more now? As Mischel and Zimbardo both recognize the key is developing the self-control to delay gratification and then using this power to achieve a balance between appreciating the past, enjoying the present, and preparing for the future.
That’s all I have time for now. I need to go build a fire and roast me some marshmallows.
Very interesting! This is definitely one of my favorite aspects of personal finance – the psychology behind it all. I love that you point out that balance is key here.
When it comes to finances, I found that early on, it was pretty crucial for me to lean towards the heavy saving end of the spectrum, which led to me gaining the ability to hang on to my money. From there, it became much easier to factor pleasurable spending back into the equation. I had gained that saving ability, so I was better able to strike a healthy balance of saving and spending.
At first reading the three money perspectives, I definitely intended to just pick one, but it was interesting seeing that the healthiest money management comes from a balance of the three. Very interesting stuff.
Great post!
Glad you enjoyed it, and thanks for participating. Balance is definitely the key. When my wife read this post she started laughing. She definitely agreed that I need to eat more marshmallows. I am trying.
I too need to learn to eat more marshmallows. When working to become debt free I went over board by saving every penny I earned now I am practicing to save and enjoy life more. I find it difficult to have the correct balance but my wife helps me out with the spending part. Lol
It sounds like we have the same problem. It is easier for me to save than to spend also. And my wife also reminds me to be more balanced. Good thing we have good women in our lives to help us keep a balanced perspective.
Great post. I have a friend who is always saying he needs to go on a “austerity” plan. He is an “Eat, Drink & Be Merry Guy”. He’s been saying this for 15+ years while I’ve been saying I need to be on a “frivolity” plan because we’ve saved too much. Now I am not quite 50 and planning to early retire in 3+ months. I’m enjoying eating my marshmallows, living a lifestyle he can’t imagine, and revelling in the benefits of our ability to delay gratification.
Congratulations on the early retirement. I have heard stories of some people who save all their lives and then have a hard time spending in retirement. Be smart about it but don’t be afraid to enjoy the rewards from all that saving. I hope you enjoy eating those marshmallows.
Interesting. Ask me on any given day and I might give you a different answer as to which time perspective I subscribe to. I guess I do use a mix of them depending on circumstances. Thanks for the “food for thought”. Now, could you add some more wood on that FIRE?
Sure. We should all get together and have a marshmallow roast. Maybe we should add some graham crackers and chocolate and make smores.
I’m all for gratification. But what hurts modern day consumers is that they’ve been indoctrinated to feel that gratification equals spending money! In fact, there’s no relationship.
I wouldn’t say there is no relationship, but it is definitely an imperfect relationship. Using money to help others and buy experiences usually proves to be more gratifying than buying things. Thanks for your 2 cents worth.
This is a great perspective for all of us future-focused people to keep in mind. If you make and save money, without ever having the intention to spend it, then what’s the point? Finding valuable activities to invest in to keep us happier in the present is very important.
That being said, I also think it is possible to enjoy live without spending substantial amounts of money. And, if you value time more than luxuries, living frugally can bring the greatest level of happiness.
I’ve just given my 30 days notice to spend my time as an online entrepreneur. Sure, I won’t make as much money (at least initially), but the flexibility and atonomy makes it worth it. Therefore, I am extremely happy that I’ve been living frugally for the last couple of years to make this possible.
Thanks for the great article! I loved the amount of research that went into this post. Looking forward to seeing many more words of wisdom from you in the future.
Congratulations on going out on your own, and good luck. I hope to be able to do that someday as well. I agree that living frugally can be worth it, especially if you are saving for a specific purpose like you did. Where we can get in trouble is when we put everything into saving for the future with no plan on enjoying it, and forget how important it is to enjoy today.