The marshmallow experiment

The marshmallow experiment frequently comes up in conversation in our house.

If you're not familiar with it, the marshmallow experiment was conducted in the 60s. Researchers gave 4-year-olds a marshmallow apiece and told them that if they could wait 20 minutes to eat the marshmallow, they'd receive a second marshmallow.

The children who were able to delay gratification were rewarded with a second marshmallow and, as it turns out, many more benefits later in life. As they grew up, they were considered more well-adjusted than their marshmallow-devouring peers and scored higher on standardized tests. Being able to delay gratification is a skill that has widespread benefits in life.

I frequently find myself in situations in which I want to eat the marshmallow right away, metaphorically speaking. I recently convinced myself for a period of about 48 hours that my next car purchase was going to be much more extravagant than I originally planned. Why upgrade to a Camry when I could get a Lexus instead? They have great safety ratings and are so quiet inside! Who wouldn't want a Lexus? I deserve a Lexus!

(Beware of all sentences that begin with "I deserve" and end with an exclamation point.)

After 48 hours of Lexus-induced euphoria, I did some calculations and came back to reality. A Lexus is not in my crystal ball, and another vehicle won't even be part of the plan for at least 3 more years.

At first glance, this situation doesn't seem like a close match to the marshmallow experiment. It might seem like I am delaying gratification only to delay gratification further, never receiving a second marshmallow. However, if you consider the financial bottom line, the situation is a close parallel. My first marshmallow will be my new (to me) vehicle and my second marshmallow will come in the form of money that I would have spent on a Lexus that is instead available for other life expenses.

Another area of life for which gratification is difficult to delay is retirement, or, more specifically, saving for it. B and I both contribute to 401k accounts and opened up IRAs a couple years ago. However, after our initial contribution, we haven't made any more contributions to our IRAs.

The tanking of the stock market soon after we opened our accounts did not help our motivation. But I quickly recognized that this reasoning was actually an excuse. When our financial advisor asked what we'd want to do when the market lost 30 percent of its value, didn't we say that that was the smart time to add more money?

Theory and reality didn't quite meet up on that decision.

It's difficult to justify setting aside funds for a retirement that won't happen for another 30 to 35 (or more!) years when there are so many expenses that could be paid now, from student loans to an underwater mortgage. However, we have come to the conclusion that not eating this marshmallow now will mean a better, easier future for us. It's time to start making regular deductions into our IRAs.

Do these fiscally responsible decisions sound boring? That's because they are! Delayed gratification is by nature unspontaneous and dull in the moment. When you get your second marshmallow, life will be exciting and thrilling, and you will be so happy for your hard work or sacrifice or whatever.

Until then, you're sitting at a table with me, and we're staring at marshmallows that we can't eat.