Money Listens

Have you ever packed for a trip and not known where you were going? What do you pack? What if you know the place, but you’ve never been there before? You still aren’t sure what you’ll need. Traveling the road to financial peace is kind of like going somewhere you’ve never been before. Here are 4 essentials that will make your trip speedier and more enjoyable. You don’t have to have them all at once, you can even pick them up as you go along.

I know you can’t stand the suspense, so here’s the list:

• Self-discipline
• Planning
• Resourcefulness
• Relationships

Today, we’ll tackle the first one. Self-Discipline is the power to control your actions, impulses, and emotions. If you’re like most people, you don’t think you have much self-discipline. It’s hard to stick with a diet, an exercise plan, or a budget.

If you took a class in psychology you might have learned about the marshmallow study. In the 1960s a Stanford University professor gave a group of 4 year olds one marshmallow. The kids were told he had to run an errand and they could eat the one marshmallow, but if they waited until he got back they would get two marshmallows. The theory was that those children who could wait had self-discipline, the ability to delay gratification and control impulse. Of course, most kids immediately ate the marshmallow. Only about 1/3 of the the kids were able to wait. (I think in the 1960s marshmallows were a much bigger deal than today.) Anyway, the kids were followed through high school. The kids who did not eat the single marshmallow but were able to wait for the two marshmallows were more posititive, self-assured, and well-adjusted. (They also scored better on their SATs). The kids who couldn’t control themselves and immediately ate the one, were more indecisive and distracted. They had poorer study habits. The point of the study was that people who can delay gratification in pursuit of their goals are more successful in life.

I would have aced the marshmallow test, because I’m not particularly fond of them. But I would have inhaled a potato chip. What does this have to do with financial success? You have to control your spending now in order to reach your goals for the future. If you can’t get past the emotional “I want this and I want this now,” you’ll never be able to save any money. The good news is, you can learn self-discipline. How? Practice it. The more often you drive past Starbucks or Sonic without stopping, the easier it gets. You’re setting small goals for yourself, and reaching them, and that makes it easier to set larger goals.

Psychological studies have shown that using your nondominant hand to brush your teeth for two weeks can increase your self-discipline. You force yourself to do something that isn’t what you usually do. Taking a personal finance class is a form of willpower training, too. No one knows exactly why this works. Whatever the reason, consistently doing any activity that requires self-discipline increases willpower — and the ability to delay gratification and control your impulses is one of the keys to financial success.

Self-control. Willpower. Determination with energy. Does that sound like gazelle intensity? Don’t eat all your marshmallows now, save some for later. I don’t think I’ll ever look at marshmallows in quite the same way.

This entry (Permalink) was posted on Thursday, April 10th, 2008 at 5:01 am and is filed under A to Z, Goals and Dreams. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response , or trackback from your own site.