If you browse the internet, a google search will return 285 million results on how to teach kids about money.
The jar system of spend/save/give is a popular one, there are games, lists of tips, rules on pocket money and eventually, you’ll probably stumble across the old marshmallow test.
This was the famous series of studies at Stanford University in the late 1960s and early 1970s where each child was offered one treat (a marshmallow, a cookie, an oreo or a pretzel) immediately or promised two treats if they waited 15 minutes.
Later in life, the children who were able to hold out for the larger reward tended to have better outcomes across the board: higher test scores, educational attainment and lower BMIs.
Interestingly, one of the follow-up studies done in 2012 altered the test slightly, by dividing them into groups and giving one group a broken promise before the test, and the other a fulfilled promise before the test. Those who had promises fulfilled prior to the test were willing to wait four times longer than the others for the second marshmallow. Essentially, when the child had a reason to believe delaying their gratification would be worth it, they were more willing to wait.
Which brings us to today’s youth. They’re still being taught that delaying your gratification is the key to financial success, but the waiting isn’t working for them. It’s not because of avocados, or any other tired cliché.
They smell broken promises, so they’re the kids who don’t trust the second marshmallow will ever materialise – and for far too many of them, they’re right.
House prices rise faster than they can save, expensive degrees often don’t result in a job, and the face of the workplace is changing so quickly their career of choice might soon cease to exist.
Delay your gratification and spend more than you earn might still seem like solid advice – but in reality, it’s woefully inadequate in the modern context.
Today’s teens will need much more strategic than their parents ever were to achieve what their parents achieved – but they’re currently receiving outdated advice and are ill-equipped for the challenge.
Instead, they’re finding themselves dealing with student loan hangover for a decade, for a qualification that’s done little to improve their career prospects, wondering how they’ll ever afford a home, let alone a retirement.
That makes their future sound bleak – and many do seem to see financial success as something reserved for the rich.
But I don’t want it to be that way – I want to change the game for this generation.
To hear how, and to learn tools to help your kids or grandkids navigate the challenges that await them, I invite you to my Financial and Career Smarts Seminar.
Tickets can be found here, and readers of Grownups receive a 50% discount – simply use the code ‘equipme’ to redeem.
Come along and let’s equip the next generation for a brighter financial future.
Hannah McQueen is an author, Authorised Financial Advisor, Chartered Accountant Fellow and the founder of both enableMe – Financial Personal Trainers and EquipMe Now.