How Not Eating a Marshmallow is Key to Financial Success

I recently read this interesting Reason magazine interview with New York Times science writer John Tierney, co-author of the new book Willpower: Rediscovering the Greatest Human Strength. The interview starts with an explanation of the famous “marshmallow test” experiment in which 4-yr olds were given a marshmallow and told that they could eat it but that they would get two marshmallows if they waited 15 minutes before eating. The kids who were able to resist eating the marshmallow not only got a second one but ended up doing better in school and in their lives in general.

When you think about it, the comparison of the marshmallow test with what we need to do to be financially successful is pretty obvious. Staying out of debt and saving is primarily about being able to delay gratification today in exchange for benefits tomorrow. So how can we increase our capacity for self-control?

A lot of the book is about how this ability is like a muscle. The more we use it, the stronger it gets but it can also be overworked and strained. Exercising control in one facet of our life can actually make it harder to control ourselves in other areas. For example, if we start dieting and exercising, we’re tempted to “reward” ourselves by overspending.

That’s why Tierney says that one of the most effective methods is to simply remove ourselves from temptation so that we don’t have to”use up” much of our limited capacity for self-control. He gives examples like making an appointment with a friend to go jogging or keeping junk food out of your home and off your desk. We can do the same thing with our financial goals through automatic saving (which is also part of the theme of America Saves Week next week). Instead of trying to fight the temptation to spend our paychecks each month, we simply have some savings automatically set aside where it will be out of sight and out of mind. If you contribute to a 401(k) or other retirement plan, you’re already doing this. You can also set up payroll deductions for flexible spending accounts and/or health savings accounts and automatic transfers from your checking account to a savings or investment account. I actually do the reverse and have my paycheck direct deposited into my brokerage account with a smaller amount transferred to my checking account to cover expenses.

Another strategy is to break down our goals into smaller and more manageable steps. When we try to do too many things at once like start a new exercise program, a new diet, and a new budget, we can put too much strain on our self-control muscle (and you wonder what happened to those New Year’s resolutions). Instead, it’s better to break down big goals into smaller steps and focus on one thing at a time.

Finally, Tierney discusses the benefits of using technology to monitor things like our weight and our spending as a way to keep ourselves on track. He specifically mentions using mint.com to track his spending and alert him by email when he starts to spend over his budget in a particular category. This allows him to get immediate feedback on something that would otherwise take a much longer time for its impact to be known. Of course, by then, it’s often too late to do anything about it.

Likewise, I’m using mint.com and experimenting with a similar program through my credit union to see which one I like better. What I’ve found so far is what I’ve already known: my weakness is eating out. The worst part is that these meals aren’t helping with my health and fitness goals either.  One technique that has helped is to purposefully eat about half of my meal. I find that this is enough to fill me up and I can use the leftovers as a second meal, cutting both my calories and expenses in half. I’ve also started using Groupon-like coupon deals.

Given how much self-control it takes for me to exercise regularly and eat healthier, I’ll need all the help I can get. Any ideas on how to spend less eating out? Leave them in the comment section below.

 

 

 

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