Born to Spend (or Save): It’s All in Your Genes

When it comes to personal spending and saving habits, it's all in the genes, a new study says. Is it true that we really can't help ourselves?

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Now I get it. We can’t help ourselves. When it comes to spending and saving, we are genetically wired to be what we are, and there isn’t a lot anyone can do about it, according to a study by Stephan Siegel at the University of Washington and Henrik Cronqvist at Claremont McKenna College. The two scholars looked at the money habits of 15,000 sets of Swedish twins and found the same patterns in even those who had lost contact with one another.

Some of us naturally squeeze every penny; the rest of us can’t leave the mall with more than the lint in our pockets. That’s just the way we are.

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But genetics do not tell the whole story, the researchers concede. Parenting and life experiences have an impact, especially on the saving and spending habits of young people. Still, by the age of 40, the authors assert, learned money behaviors recede and habits are almost fully governed by a person’s genetic predispositions.

“Parenting effects on savings behavior are strong for those in their twenties but decay to zero by middle age,” the authors write. “Parents do not have a lifelong non-genetic impact on their children’s savings.” As reported on

“There is overwhelming evidence across the board that the genes matter and that between one-third and 50% of our behavior is determined by our genes,” Siegel says. “As such, it seems that it would be counterintuitive to try to change a spending or saving behavior, since it’s determined to such a great extent by genetics.”

The report says that any serious overhaul of an individual’s financial behavior may not only be difficult, but also pointless.

“A person might be better off if they can do what’s innate to them—like if they’re a big spender, then they’re probably better off spending and having less in retirement, than being forced to save and go against what’s natural,” Siegel says. “So long as people don’t become dependent on the state — and this is what policymakers are trying to make sure doesn’t happen — a person might have better utility if they are allowed to do what they want to do, rather than being forced to do something that is against what is innate in them.”

When it comes to innate savers, I hope this is all true because most of us come from households that set a bad example, financially speaking. How else can you explain $16 trillion of personal debt? We don’t need to change the savers; we need to encourage them.

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But we do need to change the spenders, and despite this bit of dismal science it can be done. This is what the global financial literacy movement is all about. This is what is behind the push for personal financial education in schools. Get to people early and at least some will form good habits that last.

Even the authors say that genetics, while the dominant influence, is not the only influence on our money habits. They also point out – and this is critical – that society can tolerate innate spenders only as long as they are able to pay their way. For obvious reasons, many end up needing public assistance.

So, it seems, many spenders must either change against their nature or have change forced upon them. We no longer have the resources to indulge what comes natural.