WHEN it comes to teaching kids about money, Mrs Money and I do it differently.

We keep it simple and focus on a single concept: Deferred gratification.

What's that? Developmental literature shows it is the key to financial, academic, social and every other kind of success.

It is the ability to put off pleasure in order to accomplish something - like working, studying, saving money and even developing friendships.

The easiest way for kids to learn is through games. Here are three of our family's 'crazy money games'. We have about a dozen.

All combine lessons on money and deferring gratification. Thanks goes to our daughters, ages 10 and 13, for being such good guinea pigs all these years.

(i) The game our kids play the most is a deferred gratification exercise.

It requires them to wait before taking their first bite of food at dinner.

It's not easy when you're hungry.

A one-minute wait earns them 10 cents. Two minutes is worth 20 cents and three minutes gets 30 cents.

We cut it off at 3 minutes since the food gets cold.

It is very similar to the marshmallow experiment in the accompanying story.

(ii) A money game at restaurants focuses on their highest mark-up item: Drinks.

If you ask for water instead, you can quench your thirst with no cost and no calories. It's a great inflation fighter.

When our kids order water, they get to split the savings with us.

If a drink costs $2 and water costs $0, then our daughters earn half the savings of $1.

It also teaches a lesson of capitalism: Don't take all the profits.

Deals work best when there is something in it for everyone, including mom and dad.

A few fast food restaurants have caught on to this trick and serve water in very small cups.

We counter it by asking for 3 cups of water when placing our order.

(iii) The third game is one I picked up from watching the news on TV. It said Americans were paying 'cash for guns' in Iraq. The scheme was a big success with a lot of weapons getting surrendered.

So I said to Mrs Money: 'Why not cash for candy?'. She said, 'Huh?', which is what she usually says when she first hears my ideas.

Now, we buy back the junk food our kids routinely get from friends, relatives and schoolmates.

I grade the unhealthy food.

'C' is for snacks with high calories and fat content, like potato chips. 'B' is for ice cream and most candy bars. 'A' snacks are the best of the bad food, like chewing gum and milk chocolate.

Our kids get to sell the junk food back to us at 30, 20 and 10 cents for grade C, B and A snack items.

Mrs Money and I dispose of the contraband in the conventional way.

We blow it up. Just kidding.

Marshmellow test: Kids who can wait fare better as adults

THE importance of deferred gratification was first confirmed in the 1960s with a famous experiment at Stanford University in California in the US.

Four-year-old kids were given a marshmallow and told they could have another IF they waited 20 minutes before eating the first one.

Some of the little kids waited. Others could not and ate their single marshmallow.

Researchers followed the progress of the children over the years and found the kids who were able to wait as 4-year-olds were more dependable and well-adjusted as adults.

They also scored an average of 210 points higher on their college admissions test (SAT).

Harvard University conducted its own tests and found similar results. Kids who were able to defer gratification did better as adults.

The opposite of delayed gratification is impulsiveness. It's not a good quality if you want to get rich.

Impulsive people enjoy spending their money the moment they get it. They also find it hard to resist buying things they can't afford.

These traits, of course, are detrimental to wealth accumulation.  Back to Columnists