As Christmas approaches, Americans are once again spending a lot of money. With that in mind, here are some thoughts on the importance of self-control in our lives.
Experience, an excellent teacher, has taught me many critical lessons. I learned word processing through experience. I learned how to use and teach statistics through experience. I learned how to parallel park through experience. There are many other critical lessons, however, that I learned in other ways. I learned not to drink Drano and Prestone, but not through experience. In life, I have learned not to drink and drive and not to smoke cigarettes, but not through experience. Experience can be a great teacher, but there are some lessons best learned in other ways.
My mother believed that teenagers could not be good drivers until they had their first accident. According to her analysis, as teens begin to experience the freedom of driving, they inherently become proud and overconfident, which inevitably leads to an accident—and it is only after the first accident that they approach driving with sufficient humility. Hence, my mother never expected us to be collision-free. She just prayed that the necessary accident would be a small one. Conversely, the driver’s education program that I used with my boys has a higher goal, since it aims for “collision-free” driving. Is the experience of an accident a necessary part of learning to be a good driver? Must we always learn by failure?
Clearly there are some lessons that should not be learned by failure, because they are too costly. Some “experiences” may even lead to death. Those who experienced drinking from the bottle of Drano learned their last lesson. How about learning money management? Must we learn money management through failure? Is there another way?
In his novel, “Jayber Crow,” author Wendell Berry suggests that learning money management by experience is the typical plan, when he writes of those born during the depression, “To owe what you had not yet earned, to have to work to earn what you had already spent, was a personal diminishment, an insult to nature and common sense. Most of them knew this from experience.” Even though the lesson was learned by experience, his quote also suggests that common sense should be enough to shift the balance, at least for some.
Evidence suggests that learning financial management through failure is the more typical way, that common sense might not be very common. Research by University of Arizona professor Soyeon Shim, based on more than 2,000 first-year college students, found that 73 percent of 18-year-olds had made a financial mistake (such as not paying a bill on time, maxing out a credit card, or taking out a payday loan). Such failures can provide very important learning experiences. We can hope that the mistakes were fairly small, that the consequences were short-term, and that they were not repeated. Hopefully these teens are learning from their mistakes.
But the fact that 27 percent of the teens had not made a financial mistake gives us cause to think that there may be another route to forming good financial habits. Shim suggests in her analysis that the primary determinant is parental communication. When parents are directly involved in teaching teens about wise financial decisions, teens are less likely to make mistakes. It seems that parental involvement in financial maturity is just as important as it is in sexual education and character development. It is imperative that parents model and communicate financial wisdom to their teens.
Recent research at Grove City College provides evidence of yet another critical component. The best predictor of financial maturity in a recent study of over 200 teens was self-control. Teens who had higher levels of self-control had higher scores on financial habits than other teens. When including religiosity, parent-teen relationships, and self-control as possible factors which could predict financial maturity, only self-control was a significant predictor.
This suggests that financial maturity should not be seen in isolation of the broader picture. Students who develop high levels of self-control will tend to make better financial decisions. Although it is clearly important for parents to talk with their teens about risky financial practices, it may be just as important to foster healthy levels of self-control, generally speaking. Just as self-control has been shown to predict fewer problems throughout one’s lifespan—i.e., less negative emotions, fewer eating and drinking problems, less aggression and violence, as well as better psychological and academic adjustment—self-control also predicts better financial habits. Self-control does appear to be at the core of psychological health.
Fostering self-control in your children and your teens (which assumes you are modeling self-control in your own life) is one of the most important investments parents can make in their sons and daughters. It will pay rich dividends.