The Joys of Delayed Gratification

​The Marshmallow Test

Back in the day, before Facebook, Amazon, YouTube, Google, and the iPhone a psychologist named Walter Mischel, PhD, explored self-control in children. 40 years ago, he performed a simple experiment that was highly effective at determining a child's level of self-control. This experiment is commonly referred to as "the marshmallow test," and has led to the study of delayed gratification.

Here's how the experiment was implemented:

Mischel and his colleagues presented a preschooler with a plate of treats such as marshmallows. The child was then told that the researcher had to leave the room for a few minutes, but not before giving the child a simple choice: If the child waited until the researcher returned, she could have two marshmallows. If the child simply couldn't wait, she could ring a bell and the researcher would come back immediately, but she would only be allowed one marshmallow.

Read Full Article Published by the American Psychology Association (APA)​

(pay particular attention to the results of the follow up on page two.)

Pay Your Future Self by Saving

Self Acknowledgement

Confession, I am horrible at saving! In fact, I use to scoff or look down on people who saved for a rainy day or retirement. I'm sure I could point to a few reasons for this limiting belief. One being that I didn't grow up in a family of savers. To this day, my 55 year old mother doesn't have any savings or retirement account. I also acknowledge that my criticism of others was meant to mask my own shame and guilt around not saving.  

Even after reading investment books like "The Intelligent Investor" by Benjamin Graham; "MONEY Master the Game" by Tony Robbins; and "The Snowball"(a Warren Buffett biography) by Alice Schroeder I FAILED to change my beliefs around savings. On an intellectual level, I knew why to save, how to invest conservatively, the value of having a rainy day fund, and the power of compound interest.

Why then, at the time of starting this financial intelligence challenge, do I have no rainy day fund, and one months worth of contribution into a retirement strategy? Because, knowing a thing and doing a thing are two separate things. As the saying goes, you need to walk your talk. You also NEED to acknowledge that these things are necessary and vital to living a harmonious life. It's been hard for me to face these truths and look at my own shortcomings. Nevertheless, it has enduced a sense of ease because now I know what I need to work on - Cultivate the habit of savings.

Confession, I am horrible at saving! In fact, I use to scoff or look down on people who saved for a rainy day or retirement. I'm sure I could point to a few reasons for this limiting belief. One being that I didn't grow up in a family of savers. To this day, my 55 year old mother doesn't have any savings or retirement account. I also acknowledge that my criticism of others was meant to mask my own shame and guilt around not saving.  

Even after reading investment books like "The Intelligent Investor" by Benjamin Graham; "MONEY Master the Game" by Tony Robbins; and "The Snowball"(a Warren Buffett biography) by Alice Schroeder I FAILED to change my beliefs around savings. On an intellectual level, I knew why to save, how to invest conservatively, the value of having a rainy day fund, and the power of compound interest.

Why then, at the time of starting this financial intelligence challenge, do I have no rainy day fund, and one months worth of contribution into a retirement strategy? Because, knowing a thing and doing a thing are two separate things. As the saying goes, you need to walk your talk. You also NEED to acknowledge that these things are necessary and vital to living a harmonious life. It's been hard for me to face these truths and look at my own shortcomings. Nevertheless, it has enduced a sense of ease because now I know what I need to work on - Cultivate the habit of savings.

How to Make Saving An Automatic Habit

​Specific + Easy + Trigger =  New Habit

​We've all been there before. We tell ourselves, "Today is the day I'm going to change. Today is the day I'm going to start my diet, or today is the day I'm going to start exercising." A few days later, what happens? We've given up, or even worse, we forgot we made the commitment in the first place. 

Developing new habits is HARD! It's easy to change our mind, it's somewhat easy to recite an affirmation, and changing our behavior is difficult, but when done, is so fulfilling. How then do we go about changing our behavior, specifically, our behavior around savings?

While looking into habit, and more specifically, how to establish new habits, I came across the work of BJ Fogg, PhD, Stanford University. He's known for the habit forming Fogg Method. "Designing for behavior change is systematic. It's not guesswork." And this is where I've gone wrong in the past.

In the past, I've aimed for big behavior changes, and have failed many times. The cycle of try and fail can get discouraging, and eventually lead to stagnation and rigidity. So, I thought I'd try something a bit different, and the Fogg Method appears to be a method worth trying.  

While looking into habit, and more specifically, how to establish new habits, I came across the work of BJ Fogg, PhD, Stanford University. He's known for the habit forming Fogg Method. "Designing for behavior change is systematic. It's not guesswork." And this is where I've gone wrong in the past.

In the past, I've aimed for big behavior changes, and have failed many times. The cycle of try and fail can get discouraging, and eventually lead to stagnation and rigidity. So, I thought I'd try something a bit different, and the Fogg Method appears to be a method worth trying.  

The method consists of three steps.

What is Financial Intelligence?

​Defining Financial Intelligence

​To ensure we are all on the same page, I'd like to define a few terms and develop a working definition of financial intelligence. Let's turn to Webster and start by defining the terms as they appear in the dictionary.  

Definition of financial: relating to finance or financier.

Definition of finance(s)
1: money or other liquid resources of a government, business, group, or individual.
2: the system that includes the circulation of money, the granting of credit, the making of investments, and the provision of banking facilities.
3: the science or study of the management of funds
4: the obtaining of funds or capital :financing.

Definition of intelligence
1: the ability to learn or understand or to deal with new or trying situations: reason; also: the skilled use of reason.
2: the ability to apply knowledge to manipulate one's environment or to think abstractly as measured by objective criteria (such as tests).
3: the act of understanding or comprehension.

Working definition of Financial Intelligence
1: the ability to learn or understand or to deal with new and trying situations in regards to money or other liquid assets.
2: the act of understanding or comprehending the system that includes the circulation of money, the granting of credit, the making of investments, and the provision of banking facilities.
 
In other words, the more you understand how money works in our capitalistic society, the higher your financial intelligence (which I will begin to refer to as FQ).

The 365 Day Financial Intelligence Challenge

The Vision

Improve the financial literacy of ALL young adults

The Mission

Provide basic, intermediate, and advanced financial education to young adults

The 365 Day Challenge

Post financial literacy content once a day for 365 consecutive days. Start date: October 1, 2017

UPDATE: October 9, 2017

The 52 Week Challenge

When I first committed to this challenge, I was overly ambitous. It turns out that attending school full-time, and working part-time doesn't leave a lot of room to do research and write a full post every day. ​

With this said, I have adjusted to challenge to a 52 financial intelligence challenge. This will allow me a whole week to put together a valuable post.

The Why

Behind most big life commitments is a motivating force, a big why. To provide context and help you gain a deeper understanding of my big why in regards to this challenge, I must tell you a bit about myself.

I was born and raised in a small town in Southern Utah. I’m the oldest of five kids, and grew up very poor. I know it’s not that different from a lot of people. What is different however, is how much effort, dedication, and determination I used to get myself out of such a debilitating upbringing.