You might not think there's a link between your child's relationship with dinner and your relationship with money, but there is -- after all, sometimes the most interesting lessons come from the unlikeliest of places. Here are three things you can learn about finance from your kids' eating habits.
More colors and flavors are more fun to eat
You would think that kids have the same preferences as adults when it comes to how food looks. You would be wrong.
A study of both children and adults found that children like variety and color a lot more than their bigger counterparts. On average, they preferred "seven different items and six different colors on their ideal plates, while adults tended to prefer three different colors and three different items."
There is an important lesson here. Children value, instinctively, the joy of diversification -- and so should you.
Think of your portfolio as a plate filled with different colors and flavors. Add a few more items, and suddenly your plate is not only a lot more fun to look at, but it's actually become healthier, too.
More diversification means less volatility, and research into investor behavior confirms -- over and over again -- that a mix of assets will serve you better than concentrating too much in one area. This has a perfect parallel in food: We all have our favorite dishes, but with the exception of chocolate their is no single perfect dish that can give you everything you need (and yes, I have grudgingly come to accept that chocolate lacks certain key nutrients).
In other words, don't overload your plate with one thing, or even with two or three. Diversify your your portfolio to get demonstrated long-term benefits of variety. Your portfolio will thank you.
Everything is easier when taken in bite-sized pieces
Why don't kids eat fruit at school cafeterias? Maybe they prefer other things, like fries, or maybe it's because an entire apple is a relatively intimidating thing when your mouth is tiny or filled with braces. You may not remember those days (or you managed to avoid them) but eating with braces is no simple matter.
Anyway, to get to the bottom of the fruit consumption problem, a series of studies investigated what happens when you give school cafeterias a commercial-grade fruit slicer. The results are mind-boggling.
In a pilot study of elementary schools, fruit sales jumped by 60% on average when staff started slicing them. A similar test carried out across six middle schools found that the schools with fruit slicers enjoyed a 71% rise in apple sales. A critical bonus: The students were also much more likely to eat the whole apple.
In other words, making something that's good for you (like eating apples) more convenient can help you to actually want to do it.
Surely there are lessons here for finance?
The first is the importance of convenience. In my opinion, there is nothing more convenient than automation. It literally removes the word "effort" from the equation, making it possible for you to get all the benefits of putting money into your savings account or paying your bills on time without actually having to do anything.
After spending a few minutes to set up your debits or bill payments, you're done, and you can focus on the relatively smaller task of not overusing the spending money that's been left in your bank account.
The second lesson involves the fantastic palatability of bite-sized pieces. Keep your goals bite-sized, and you'll find they're a lot easier to stick with.
After all, saving $25 a month every month is better than setting aside $200 one time and never doing it again. So keep it small at first, and build on it. Every little advance you make -- each debit into your savings account, each auto-deduction into your 401(k), each time you decline to spend money now in favor of a bigger goal later -- is another slice of apple. Pretty soon, you'll be shocked to find you've eaten the whole thing.
A memorable name can even make carrots exciting
One thing that can be hard about getting children to eat vegetables is the groaning, soul-crushing repetition of how healthy they are. "Yes fine, healthy, whatever that means," every six-year old is (probably) thinking, "Augh, what could be less fun than that?"
Building on prior research that suggests descriptive names increases healthy food choices, researchers honed in on the humble carrot, rebranding it the "X-ray Vision Carrot" for two days at five unsuspecting elementary schools. They found that while students didn't take a bigger portion of X-ray Vision Carrots, they did eat more -- about twice as much.
To see if this could be extended for more students, more veggies, and a longer period of time, a longer-term similar study was carried out at another two elementary schools. This time, X-ray Vision Carrots joined forces with Power Punch Broccoli, Silly Dilly Green Beans, and Tiny Tasty Tree Tops (also broccoli).
The simple name change had a huge effect. The number of kids taking a hot vegetable increased 99% with the new names. Broccoli selection rose nearly 110%, green beans 177%, and carrots 30%.
In other words, a simple name change suddenly made carrots, broccoli, and green beans a really attractive food.
What does this mean for you? Sometimes, all we need is a good visual and a fun name. Instead of saying you need to "save for retirement," make it a little more vivid. Something like "I'm saving for a few decades of European traveling, tropical-island snorkeling, and summers playing with my grandkids in the park." Isn't that just... nicer?
The same goes for shorter-term goals. "Emergency Fund" is suddenly such a dismal thought. What about "Escape Hatch Fund"? In other words, think of names for your goals that describe what is really so great about them, names that empower and inspire you rather than make you think of everything that could go wrong.
Because "healthy," as kids already know, is kind of boring by itself. But X-ray vision? That would be totally awesome.
To learn more, take a look at the following papers:
"Food Plating Preferences of Children: The Importance of Presentation on Desire for Diversity" by Francesca Zampollo, Kevin M Kniffin, Brian Wansink, and Mitsuru Shimizu
"Finger Fruits: Pre-Sliced Fruit in Schools Increases Selection and intake" by Brian Wansink, David R Just, Andrew S Hanks, and Laura E Smith
"Attractive Names Sustain Increased Vegetable Intake in Schools" by Brian Wansink, David R Just, Collin R Payne, and Matthew Klinger.