The Marshmallow Experiment

In 1972, Stanford did a study about delayed gratification with children. It involved giant marshmallows and testing their patience. 

You can see a short YouTube video about the study here. Basically, the kids who could sit alone with a giant marshmallow without eating it for a certain length of time were rewarded with a second giant marshmallow. Fun, huh?

Some kids could be patient and reap the rewards; some could not. I was a small child when the study was conducted, and I wonder which side I might have been on. I HAVE learned to be pretty patient as an adult. One of the areas in which I’ve seen improvement is in finances. I have become a good money manager–I could be paid once annually and budget so that I won’t run out before year’s end, including having enough money to pay my own quarterly taxes–self-employed people do that.

Speaking of taxes, I try not to overpay so that I qualify for a “refund,” because the government does not practice The Marshmallow Experiment.

Huh?

The government’s governing tax agency (the IRS) does not reward you for waiting patiently to spend your overpaid tax money once you realize you paid them too much. In fact, when you overpay your taxes for any 12-month period and get a “refund” during the first quarter of the following year, you are, quite literally, loaning them money INTEREST FREE. I guarantee they are making something on your portion of their coffers, and they are not going to share ANY of it with you.

Don’t you want to keep more of your own money? I sure do. If you overpay and receive a refund, especially on a regular basis, talk with your tax professional and/or your human resource person to adjust your withholdings so more of your hard-earned cash stays in your pocket. It’s better to owe a little on April 15 (even though paying the federal government is not my favorite thing to do on my birthday) than to get a ton back.