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Do you want one marshmallow or two?

Do you want one marshmallow now or two in 15 minutes? You may wonder why we are asking this when we are financial planners!

But the results of seminal research at Stanford University about delayed gratification may well be relevant to how you plan your finances.

In the original experiment researchers offered young children a marshmallow, but if they were prepared to wait, they would get two. (Actually, it wasn’t always a marshmallow; some children who preferred cookies or pretzels were offered those, but we digress!)

The children, who were on average about four years old when they did the experiment, were then followed up later in life. Those that waited for the second treat tended to do better in life. For example, they did better in exams, were less likely to be obese or be involved in substance abuse, and had better social skills. The research has come in for some questioning in recent years, but it is still widely accepted that it showed there is merit in delaying gratification.

So how does that apply to financial planning? Well, what about the temptation to buy now, versus the longer-term plan to save? Do you need to buy that coffee or have another meal out tonight? Doing without now can lead to bigger rewards in the future.

If you reduce the amount of impulse buys you will have more to save. It really is that simple!

You might want to save for a house, a car, a boat or towards your pension. Delayed gratification can really help with your financial security in the future.

And one day you will look back and be glad you didn’t eat the first marshmallow!

If you want to know more about saving and investing, please give us a ring on 01246 435 996. You can read more about the fundamentals of investment and download our guide here.

No individual investment advice is given, nor intended to be given in this article and liability will be accepted in respect of any action you may take as a result of reading this article. If you are unsure you are urged to take independent investment advice.