This special series is part of CentSai’s commitment to financial literacy at every level. We’re collaborating with financial education advocate Sam X Renick on a series of short interviews, videos, and tips. Author, speaker, and educator Daniel Blanchard tells Renick the most important money lesson he learned as a child and shares a tip for teaching kids about money.

A Childhood Money Lesson

Sam X Renick: What is the most important money habit you learned as a child? Briefly share the story of how you learned the habit and what impact it has had on you throughout your life.

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Daniel Blanchard: Unfortunately, I was not really taught any important money habits as a kid. I grew up in an upper-lower-class or perhaps a lower-middle-class family. We never really had any money, and when we did, we certainly weren’t encouraged to save it. Money was never spoken of in my family, and that was a sad thing.

The Most Important Money Lesson to Teach Kids

Renick: If you could teach a child only one money habit, what would it be? Briefly explain why.

Blanchard: I think the best money habit to teach any child is the difference between bad debt and good debt.

I don’t want any child getting buried under bad debt, which will eliminate the number of choices they have as they get older.

I don’t want see any child become a financial or economic slave. On the other hand, if a young person is taking on debt for something like a business or a certification or degree that will make them a lot more money than their debt, than I say to go for it. I say that because that’s considered good debt and may help them get a leg up on their financial future.

A Final Thought: What if the Research Is Wrong?

Renick: Cambridge University research indicates that adult money habits are set by age seven. What if the research is wrong and adult money habits are formed earlier, perhaps around the age the “give mes” set in? What does this mean for families, schools, and the financial education industry?

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Blanchard: Well, this means we have to teach kids that instant gratification is not good. Instant gratification can lead to bad debt and limit the possibilities in their lives. We need to teach them as early as possible to delay gratification. And we want to make families aware of the marshmallow test from the 1960s.

The marshmallow test showed everyone how delayed gratification offers a lifetime of rewards while instant gratification puts one behind in the race — and usually keeps one behind in the race. Kids are not going to learn this on their own. We need families, schools, and even the financial education industry to step up and take an active role in the education of our youth, including finances.

Take Action

Help your child or students set one long-term savings goal in writing. Go online and read about the marshmallow test.

Did you know? Marshmallow test researchers found that children who were able to wait longer for rewards tended to have better life outcomes, as measured by SAT scores, educational attainment, body mass index and other life measures?

Discover more about at Daniel Blanchard at his website.