Sometimes You Should Eat the Marshmallow

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.