girl in sweet shopThe confectionary company Haribo used to air an advertisement showing a number of different children sitting alone at a desk with a single Haribo sweet in front of them – do you remember it?

As the ad progressed, every child succumbed to the allure of the sweet at differing speeds, with some scoffing the sweet immediately and others squirming on the seat for minutes before eating it. The advertisement’s point was clear – no child could resist a Haribo sweet!

I imagine the Stanford University Marshmallow Tests (1960’s) inspired the advert. During the test Professor Walter Mischel gave children, between 4 and 6 years old, a simple proposition: if they could sit with a marshmallow in front of them for fifteen minutes without eating it, they would be given two treats at the end of the time period. Naturally, some of the kids jumped at the chance for instant gratification and ate the treat straight away – but others succeeded in overcoming temptation.

Further research found that the kids that chose to delay gratification scored better academic results, earned higher salaries, and were less prone to obesity throughout their lives.

From a financial education standpoint, I think the Marshmallow Test is an excellent way to start a conversation about financial ‘interest’ with your child.

Start by conducting your own Marshmallow Test with your child (substitute marshmallows with Haribo or Goji Berries – whatever takes their fancy!) and take note of how your child responds.

Irrespective of whether they choose instant gratification over self-control, chat with them about their choice and explain that interest on money saved works in much the same way.

If you earn money and decide to spend it straight away, it’s gone forever.

BUT if you choose to put your money somewhere where it will earn interest, then your money will grow over time and you’ll end up with more money.

If you can practice some self-control and not spend the money, you’ll earn more without having to do anything but wait!




PennyOwl: Helping Parents Raise Money-Smart Kids

Download the free app or check us out on Facebook