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What can the Marshmallow test teach you about saving?

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Marshmallow teachs about savings

What can the Marshmallow test teach you about saving?

Sometimes a sweet treat — and the power to resist it — can unlock not just health, but even wealth

In the 1960s and ‘70s, researchers at Stanford University gave pre-schoolers a tricky task. The toddlers had to sit in a room with a marshmallow for at least 15 agonising minutes — and resist eating it. If they could manage that, they would be rewarded with not one but two marshmallows.

Predictably, some children gobbled up the snack immediately. Others created crafty ways to ignore the temptation –  singing songs, covering their eyes and shuffling away to put as much distance between them and the treat as possible.

Despite seeming frivolous, this experiment reveals much about human nature and our attitudes towards reward and delaying reward.

The power of self-control

Power of Self Control

Following this initial test, researchers charted the children’s progress over the years; and found something telling about the children who were able to delay the reward. Those who resisted eating the first marshmallow immediately achieved higher exam scores in high school and were emotionally more resilient. Like the Marshmallow test, many studies have come to a similar conclusion: that people who are capable of self-control enjoy more success in life.

So how does this relate to saving in India? Building up healthy savings is not about denying oneself, but simply in realising, like the children and the marshmallow, that by waiting a little while longer, our reward will be increased.

Know more, about our wealth solutions.

The savings struggle

The Savings Struggle

We know that people today can find saving an increasingly difficult challenge. As our recent survey has shown, the number of affluent consumers in India, Singapore, China, Kenya and Hong Kong who feel confident of reaching their savings goals fell by 10% in 2016 compared to the year before.

But perhaps that is only natural: many of us, after all, have goals (such as buying a property, or retiring at 50) that cannot be achieved overnight. Growing enough wealth to achieve these goals takes time and requires years of careful forward planning in order to maximise funds and make your money work for you.

Building your savings self-control

Building your Savings Self Control

The simple act of keeping your goals in view can help you increase your level of success and long-term happiness. Understanding that long term planning increases your satisfaction can help rewire your savings mindset. That in turn will lead to clearer thinking when it is time for you to consider investing and financial planning.

Keeping your savings goal in mind

Keeping your Savings Goal in mind

To that end, start by figuring out why you want to save. We all want to put aside a large sum. But the key is to ask yourself, what are you saving it for? Do you dream about saving up for a three-week vacation in South America so you can scale Machu Picchu? Are you keen on sending your children to university in the UK or the US? Or do you want to buy yourself a limited edition watch for your next birthday? Keep your eye on that prize and you’ll stay motivated.

Want more specific, actionable goals? These money-saving tips can lead to a healthier savings account:

  • Buy time, build savings. Instead of buying something immediately, wait for two days. If you still want that designer bag or just released gadget, then you can go back and buy it — but you may find that after a few days, your immediate hunger for it has passed.
  • When you get a raise, save it. Every time you get a salary upgrade, allocate a portion of that raise to a mutual fund or fixed deposit.
  • Learn from your friends. If you know someone who has successfully saved up and met their financial goals, ask them for tips. It can’t replace the advice of a professional financial adviser, but it can give you inspiration and point you in the right direction.

Stepping into savings? you need support

Stepping into Savings

In the end, starting your savings journey isn’t about diving immediately into the complex question of how to save — it’s just deciding to do it. When you pursue your goals whole-heartedly, half the battle is won. And that realisation may be as sweet as a marshmallow.

Know more, about our Savings account and deposits.

Want to learn how to maximise your savings? Talk to our financial experts at Standard Chartered Premium Banking today. Our Premium Executives will be with you every step of the way as you plan your future to help you achieve your savings and investment goals.

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Disclaimer

This article is brought to you by Standard Chartered Bank India. All information provided is for informational purposes only and is not intended to be construed as advice or an offer for any product or service. Standard Chartered is not liable for any informational errors, incompleteness, delays, or for any actions taken in reliance on information contained herein.

Standard Chartered Bank does not provide any investment advisory services under the wealth proposition. Standard Chartered Bank in its capacity of a distributor of mutual funds or while referring any other third party financial products may offer advice which is incidental to its activity of distribution/referral. Standard Chartered Bank will not be charging any fee/consideration for such advice and such advice should not be construed as ‘Investment Advice’ as defined in the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 or otherwise. Mutual Fund Investments are subject to market risk. Read scheme related documents carefully prior to investing.