As an increasing number of Americans live into their 80s and 90s, many families are struggling to find ways to make retirement dollars — that were once supposed to support seniors for years — now stretch over decades.
More and more, families have to care for the very elderly, as well as look after children who might be college grads but haven't found a job in a difficult economy.
All this requires one very important thing: lots of money.
Psychologists and other researchers have spent decades studying why some people are better than others at saving money, so they can address such needs later in life.
In the early 1970s, researchers conducted a marshmallow experiment, where they had young children sit before a table. The researchers placed a marshmallow on the table and told each child that she could eat it — but that if she waited 15 minutes, she could have two marshmallows.
Over the years that followed, researchers found that children who were able to hold off eating the marshmallow — who delayed gratification — did better at school. Other researchers identified brain differences between people who were impulsive and those who had more self-control.
Much of the research into self-control has been focused on documenting which people have it and why. But new research is trying to find whether there are ways to boost self-control among young people, especially when it comes to financial matters and making responsible long-term decisions, such as saving for retirement or nursing care late in life.
While brain biology plays a strong role in shaping temperament, some new studies have found that social factors make a difference in whether people become spenders or savers. Chief among them: the role of parents.
"We found that parents played a really big role in the kinds of behaviors that their children exhibited," said Joyce Serido, a researcher at the University of Arizona, Tucson. "So, those kids who said they spoke with their parents about financial matters actually performed more responsible financial behaviors."
Serido said that she and her colleagues interviewed large numbers of freshmen entering the university and documented different aspects of their family lives. Young people who reported their families had included them in conversations about money and budgets — who, for example, roped children into discussions about what kind of car the family could afford — were much more likely to make more responsible financial decisions as it came time for them to graduate from college.
Many of these students, Serido said, were using a budget, making tough choices between different wants, and saving money. She said the difference was not explained by socio-economic differences — children from well-to-do families did not save more than children from poorer families. Rather, she said, patterns of family dynamics tended to predict which kids developed strong saving habits.
Besides talking with kids about money, Serido said she would advise parents to communicate their expectations to their children — to say they expected a young person would save some portion of their allowance, for example.
So why do such conversations happen rarely when they are so important? Serido said it may be as difficult to talk to kids about bills and bonds as it often is to talk about the birds and the bees.
"The first couple of times you talk with your child about money or savings, or you talk with a parent about their health or what are they going to do with the house long-term, yeah, it's scary and uncomfortable," she said. "And let's face it, it's scary and uncomfortable because sometimes we don't want to think about it ourselves."
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RENEE MONTAGNE, HOST:
And as we've seen throughout this series, many families struggle with confronting hard questions about the future.
To talk about the psychology behind how people think about planning for the future, we turn to NPR science correspondent Shankar Vedantam. Good morning.
SHANKAR VEDANTAM, BYLINE: Hi, Renee.
MONTAGNE: Well, let's start with why it can be so hard to plan for the future.
VEDANTAM: Well, I mean, there's actually several decades of research into this. Back in the early '70s, researchers conducted this humorous experiment called the marshmallow experiment, where they sat these several small children before a table and they put a marshmallow before them. And they said if you don't eat the marshmallow for 15 minutes, I'll give you two marshmallows. What was really fascinating was when the researchers followed these children out into young adulthood and further out, it turned out that their turnout in the marshmallow test predicted all kinds of other things. It predicted how well they did on their SAT scores, how well they did in their careers, even predicted some of that propensity for addictions.
MONTAGNE: I'm guessing that those who ate the marshmallow without looking to the future were the ones who had problems in all of those areas.
VEDANTAM: Exactly. So, it was a measure of impulsivity. You know, how impulsive are you when you have a temptation before you and how well are you able to defer or delay gratification.
MONTAGNE: So, you're saying marshmallow tests could actually predict whether someone would, say, become an alcoholic?
VEDANTAM: Well, I think what the test was really measuring, it was measuring some element of temperament. And in more recent years, there's been a lot of brain science, neuroscience, which has found there are actually brain differences between people who are better to delay gratification and those who don't. What's optimistic is that there's been research that finds that there are factors that are within people's control that influence whether they become spenders or savers. And it's not just about your brain chemistry, it's actually how you're raised. I spoke with this researcher whose name is Joyce Serido. She's at the University of Arizona. And she said that one factor above all others stands out.
JOYCE SERIDO: Parents played a really big role in the kinds of behaviors that their children exhibited. So, those kids who said that they spoke with their parents about financial matters, actually performed more responsible financial behaviors.
VEDANTAM: So, what Serido found was that children who were included in family discussions about budgets - you know, you're buying a car and you bring the kids in to talk about how much car can we afford, what are the tradeoffs - these are the kids that Serido found, three years into college, are making a budget of their own. They're making hard choices. They're actually saving money.
MONTAGNE: So, that's training.
VEDANTAM: It is training.
MONTAGNE: And can that overcome brain chemistry?
VEDANTAM: Well, I don't think the two of them ever rule one another out. I think there is such a thing as brain biology and the brain biology is going to be what it is. But I think nurture and training, you know, sits on top of brain chemistry. And what this new research is suggesting is that the right kind of parenting - not just talking with your kids, but also communicating your expectations to kids - you know, I'm giving you an allowance but I expect that you're going to save 10 percent of it seems to be playing a role. And it's interesting, given the last story we just heard about David and his grandma Snootzie, a lot of young people find a closer kinship to their grandparents when it comes to financial matters than they do to their parents.
VEDANTAM: Well, one possibility is that, you know, kids graduating from college today, they're coming into a recession, unemployment is high, and in many ways that reflects better the world that their grandparents and their great-grandparents grew up rather than the world that their parents grew up in. So, that might be why they find a greater connection with some of the older generations in their families.
MONTAGNE: Shankar, thank you very much.
VEDANTAM: Thank you, Renee.
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MONTAGNE: NPR's science correspondent Shankar Vedantam.
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MONTAGNE: You're listening to MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.