In the 1960s, Stanford Professor Walter Mischel started a series of experiments in which he tested hundreds of young children on their ability to delay gratification.
A child would go into a room where he or she would be presented with a marshmallow.
The researcher then told the child that he would leave and come back later. If the child did not eat the marshmallow and waited for the researcher to come back, he would bring them a second marshmallow.
The researcher would leave for 15 minutes (so long!) and study how the kids behaved. The kids acted how you’d expect little kids to act. Some ate them immediately, some agonized over the waiting and gave in, and some waited the full time and were rewarded with a second marshmallow.
Then, the researchers followed the children as they grew up and determined that the kids who were able to wait were rated as “more academically and socially competent, verbally fluent, rational, attentive, planful, and able to deal well with frustration and stress.” (source)
In other words, people who are able to delay gratification tend to get better results. They sacrificed a little of Present You to reward Future You.
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How to delay gratification
When people think of the Marshmallow test, they focus on the finding that those who can delay gratification get better outcomes later. They often miss other results from the study that I found remarkable.
If we agree that being able to delay gratification is a good skill, then how do we improve it?
Delaying gratification isn’t some misunderstood superpower; it’s a skill.
And if it’s a skill, we can get better at it.
Fortunately, the paper studied this exact thing!
It studied how one can get better at delaying gratification.
What did it find? (from the abstract)
“Exp. I compared the effects of external and cognitive distraction from reward objects on the length of time which Ss waited for a preferred delayed reward before forfeiting it for a less preferred immediate one. In accord with predictions from an extension of frustrative nonreward theory, Ss waited much longer for a preferred reward when they were distracted from the rewards.”
In layman’s terms – distract yourself from the rewards. If you aren’t thinking about the temptation, you are less likely to give in to the temptation.
Exp. II demonstrated that only certain cognitive events (thinking “fun things”) served as effective ideational distractors. Thinking “sad thoughts” produced short delay times, as did thinking about the rewards themselves.
If you are looking for distractions, obviously lean towards fun distractions rather than sad ones!
In Exp. III the delayed rewards were not physically available for direct attention during the delay period, and Ss’ cognitive attention was manipulated by prior instructions. While Ss waited, cognitions about the rewards significantly reduced, rather than enhanced, the length of their delay of gratification.
Again, if the rewards aren’t there and you aren’t constantly reminded about it, it’s easier to delay gratification.
These results match what we expect intuitively.
But they highlight an important lesson – do not try to “will” yourself into delaying gratification; remove those temptations completely.
It’s not about “mental strength” or some other nebulous willpower issue. All too often, we get down on ourselves for not being able to resist something. Relying on willpower is a mistake.
You need to build a framework so your willpower isn’t tested in the first place.
If you want to save more for retirement, automate your retirement savings. There is no temptation to spend that money because the money is automatically transferred out of your account. This is why the SECURE 2.0 Act required that employers automatically enroll employees into 401(k) programs – it leads to increased savings. (In fact, automation is often the answer to a lot of these types of battles.)
If you want to reduce your spending, don’t save your credit card information with a merchant. Leave your wallet or purse in another room. Make it less convenient.
There’s no Future You vs. Present You struggle if you distract yourself from the struggle!
Finding the “perfect balance”
The key takeaway from the Marshmallow test seems to be that delaying is always the right choice. Future gains for present pains.
But we can’t prioritize Future You over Present You in all situations; that would be ridiculous.
But how do you pick between spending today or saving for tomorrow?
Ask a business major and they will tell you that you can calculate the present value of something in the future as long as you know the interest rate. You can also calculate the future value of something in the present (again, with interest rates). If interest rates are at 5%, a hundred dollars today is worth $105 in a year.
They can tell you the math, but they cannot tell you which one to take.
Taking $100 today or $105 in a year will depend on your financial situation. And in life, you are presented with this choice all the time. Do you buy X or save that money?
The key is finding the balance between Present You and Future You in each and every decision.
The idea of a “perfect balance” is a myth. There’s simply the choice you have in front of you – don’t make it bigger than it is!
And when we revisit the results of the Marshmallow test decades later (Mischel was a co-author on the study), we learn that the waiting times didn’t have any “statistically meaningful relationships with any of the outcomes that we studied.”
In other words, when you included other factors about the child, the addition of the waiting times for each child didn’t change the results.
Future You shouldn’t always win, Present You needs resources too.
How do you decide between the two?
Ask Future You for advice
If you’re struggling to decide which to prioritize, consider this – ask Future You for advice.
You probably have things you want to accomplish in your life. Get married, start a family, buy a car, buy a house, travel the world, etc.
These all require money.
When you ask Future You for advice, you need to ask yourself whether your purchase today is worth sacrificing a little bit of the timeline of what Future You wants to accomplish.
If you spend $500 to buy a new television today, those are funds that won’t go towards buying a home. If you have a financial plan in which you’re already saving enough to reach your goals, then spending $500 won’t impact your plan. This highlights the importance of having a financial plan (you can build a financial plan without a financial advisor). It gives you the freedom to make these tradeoffs without guilt or worry.
What if you don’t know what you want to do?
Find a mentor.
Why are mentors so valuable? They can represent a version of Future You.
When seeking advice, we look to people whose situations most closely match what we’d like to achieve. Mentors can be anywhere. They don’t have to be older or more accomplished. They don’t have to all the traditional trappings of success either.
They also don’t need to match you exactly in all phases of your life.
They just need to be farther along on a journey that you want to embark on.
Let’s say this journey is fitness. When you go to the gym, seek to learn from those who are around you. You don’t need to talk to them and ask them to be a mentor – just watch what they do and learn. What exercises are they doing, and in what order? Think about why they’re doing what they’re doing.
You won’t learn everything simply by observation, but you’ll learn something. You can also turn to books, videos, podcasts, etc. – it doesn’t have to be in person. With all the content available online, there are plenty of folks to learn from, and it’s all at your fingertips.
But don’t blindly follow someone else’s advice, especially when it comes to financial advice.
Always put it through your filter and how it applies to your life.
And finally, if you are still unsure, lean towards minimizing regret. It works for Jeff Bezos, it’ll work for you. 😂
The Future You vs. Present You battle is one we all struggle with; hopefully, it’ll be a little easier going forward.
The post Future You vs. Present You: Cracking the Dilemma of Choice appeared first on Best Wallet Hacks.
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