The world today revolves around instant gratification. We want everything right now. And, thanks to businesses across various industries, that’s possible. Credit cards and Buy Now Pay Later programs give you instant access to money. Computers and smartphones answer just about any question you could imagine, instantly. Everything from expedited college degrees to promises of shedding pounds overnight is within your reach. This also trickles down to teaching kids about money. The “instant anything” mentality can have real-life consequences. For children who see and copy everything, this could cause challenges down the road. Finding ways to teach children patience and goal-setting skills is crucial – and the sooner you begin, the better.
What is Delayed Gratification?
Delayed gratification is the act of skipping a reward now in hopes of obtaining something more valuable or desirable in the future.
For example, a child might decide not to buy a candy bar and instead save their money to purchase a video game in a few months. You might start cooking your own meals at home instead of eating out so that you can save money for a nice vacation.
Without the ability to exhibit self-control or strive for greater rewards down the road, you (and your children) could face many financial challenges.
A significant part of managing money comes from the ability to budget now in the hopes of achieving specific goals in the future. Failing to focus on your future monetary needs can cause a domino effect on your finances.
- If you give in to financial temptations, you will likely have little to no savings and could live paycheck-to-paycheck.
- Without savings to fall back on, you become more dependent on credit cards, payday loans, and other short-term financing options.
- Becoming overloaded with credit card debt can cause your credit score to drop significantly.
- Without a decent credit score, obtaining loans for future things like buying a car or renting an apartment, will be more difficult.
- If you are approved for a loan with a low credit score, you’ll likely be charged a higher rate. The higher interest rate will make the loan much more expensive.
- If you get overwhelmed with debt, life goals, such as owning a home, pursuing higher education, or starting a business, can become exceedingly difficult.
While this example might be extreme, it demonstrates how simple buying decisions can compound into something much more significant.
6 Strategies to Teach Delayed Gratification
It’s never too early to begin teaching kids about money and delayed gratification. It’s crucial to teach this characteristic to your teens before they set out on their own. The following five tactics are a great starting point for you and your family.
1. Set Goals For Them
Sit down with your child and ask about goals or rewards they would like to achieve in the next few months. Once they have some listed, work on prioritizing them and creating end dates for the goals.
When starting out, focus on smaller goals that are easier to achieve. Use these initial items as a way to build confidence for your child and boost their motivation to keep going. Some ideas are:
- New sneakers or clothes
- Video games or mobile game cash
- Money for going out with their friends
- New sports equipment
- Hobby supplies
- Contributing to the family vacation
2. Set Goals as a Family
A great way to teach your kids delayed gratification is to set a goal as a family. Find something you would like to achieve and have everyone contribute. Kids can put a portion of their allowance in a jar, and parents can match their contributions. Some ideas are:
- A family vacation – they can save for an excursion or souvenirs
- A pool – their contribution could be pool tubes
- Going out to a nice dinner – they kick in for dessert
- Gaming console – they could save to buy the controllers or accessories
3. Track Their, or Your Family’s, Progress
It’s important to find ways to display progress visually, especially among younger children.
Determine how you will track progress and the frequency you’ll do it (e.g., weekly, monthly). By reviewing the goals regularly and providing encouragement, you’ll increase everyone’s desire to succeed.
- Create a progress chart that shows the goal
- Make a Google Sheet or Excel document and share it with them
- Teach them how to use the banking app on their phone
- Open a second savings so it’s a separate account
4. Don’t Give In
Parents want to see their kids happy. However, short-term smiles shouldn’t take away from lifelong happiness. Being a teacher for your kids is just as important.
So, if your teen runs out of money and pleads with you to buy something for them, don’t give in. If your child did something good and you want to reward them, find a different way to do it other than fulfilling their savings goal for them.
5. Celebrate Them Reaching Their Goal
Find little ways to celebrate your child’s accomplishments. This is an excellent way to build their confidence. After they achieve a goal, encourage them to make the next one a little more challenging. Some ideas are:
- Take them out to their favorite restaurant
- Offer to buy accessories if they reached a larger goal like a gaming console
- Let them pick out a reward at their favorite store
- Or, reaching the goal itself can be the ultimate reward!
6. Make Them Earn an Allowance
Achieving goals, financially and otherwise, requires hard work. Teaching this fact to your child will help them as they pursue greater ambitions in their lifetime. So, requiring your child to complete chores or perform other tasks in exchange for their allowance is a great tactic.
Some people believe chores are part of contributing to the household, and that’s fine too! In that case, you could pay them to do something outside of their regular chores.
Takeaway on Teaching Kids About Money
Whether you like it or not, children today are growing up in a world where almost anything is only a few clicks or taps away. Teaching patience and delayed gratification are two of the best lessons when teaching kids about money.
But it’s also important to remember that your children, especially teens, pick up on everything you do. So, it’s up to you to set an example. If they see you relying on credit cards, they’ll believe that’s perfectly acceptable.
We’re Here to Help!
Setting and achieving financial goals is a crucial part of life. The sooner you begin teaching kids about money, the better. There are many opportunities to teach your kids about money management at the credit union.
If you’re interested in opening a youth or teen account for your child, we’re ready to help. Call, text, chat, or stop in! We’re here to help M-F, 9am-4pm ET. (315) 671-4000.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.