Dash for cash a bad habit

Ken Krause, who teaches business and marketing at a high school in the United States, regularly asks his pupils whether they would take $100 now or wait a year to double their money and receive $200.

I bet many of us can predict the answer Krause most frequently receives. As would many adults, many pupils opt for the fast cash.

This story illustrates one of the challenges of managing money: the basic urge to grab what you can while you can and not manage too far into the future.

Marilyn Capelli Dimitroff, director of wealth management and principal at Planning Alternatives in Michigan, said many of us are not naturally wired to be good savers or investors. Investors can be overconfident that they know the outcome of things ahead. Or some of us are so afraid of losing any money that we do not take any risk and lose out on a chance to build more savings.

What is the harm in getting $100 now instead of waiting for more money later or eating the entire pizza when it’s hot, rather than saving a slice for later?

No harm, maybe, if one never hits a financial snag. But know that layoffs can hit, financial markets can collapse and plenty else can mess up your cash flow and influence how soon you could afford another pizza. Other causes for financial hardship include a job loss, reduction in pay, higher medical bills, divorce and bad financial habits.

These habits include borrowing too much on credit cards, lending or giving money to help family and friends, and a lack of savings.

Only adult problems? Hardly. Such financial traps await tertiary students, too.

Jennifer Wallace, an outreach manager at the Michigan Education Trust, said she went ‘‘way down on the list of grandmas’’ when she bought her newborn grandchild a prepaid contract to cover college tuition in the future. The baby’s parents didn’t want savings for down the road; they wanted baby furniture now.

Many grandparents, of course, see the advantage of setting some money aside for bigger bills like college tuition, Wallace said. But furniture won’t pay for an education in the future.