Are Some People Born to Spend?

In a word, yes.

And others are born to save.

This is the rough conclusion of Savita Iyer-Ahristani in her overview of a careful study of Swedish twins done by Stephan Siegel, at the University of Washington’s Foster School of Business, and Henrik Cronkvist, at Claremont McKenna College in California. Specifically, Siegel and Cronkvist conclude that 35% of saving or spending behavior is genetically based; and that this genetic inclination makes up the single greatest determinant of our financial behavior.

How did they tease out this knowledge, intertwined as it must be with parental, cultural, and economic influences? By using sophisticated mathematical techniques developed in quantitative behavioral genetics research and applying these to data from the Swedish Twin Registry (the world’s largest). They built on “an intuitive insight,” Siegel and Conkvist explain: “identical twins share 100 percent of their genes while the average proportion of shared genes is only 50 percent for fraternal twins; so if identical twins have significantly more similar savings behavior than fraternal twins, then there is evidence that the propensity for savings, at least partly, originates from an individual’s genetic composition.”

Siegel and Cronkvist are more measured in their conclusions than Iyer-Ahristani is in her summary of their study. They recognize the importance of parental values and of socio-economic status in the development of an individual’s savings behavior. But their data suggests that there is a strong and previously unidentified genetic component to saving or spending behavior, and they recommend that we use this knowledge to help manage our tendencies.

What does this mean for overshoppers? Probably that two powerful forces are at work in their habit. In the psycho-social sphere, overshopping is generally a doomed attempt to fill an important and underlying psychological need. Now we can add that it’s something of an instinct.

Lest we get too deterministic, however, there are new developments to suggest that we can significantly impact our saving or spending tendencies. At Washington State University, professor Jeff Joireman has shown that financial self-control, like a muscle, can be strengthened through regular exercise. After as little as two weeks of either mental or physical exercise, his subjects showed increased ability to resist impulse buys. A more exotic approach, presently being studied at Columbia and NYU, among other places, uses TMS—transcranial magnetic stimulation—to regulate specific parts of the brain that have now been identified as governing spending or saving behavior. In the lab, anyway—which is as far as this technique has gone—TMS can temporarily transform a spender into a saver (or vice versa).

Where are we then? At a place that gives overshoppers reason to hope. While we now know that there are genetic as well as psychological underpinnings to most compulsive buying, we also know that the behavior is modifiable. In the next few years, as the neuroscience behind spending or saving behavior gets even clearer, we may have powerful new tools for altering spending behavior.


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By Carrie Rattle

Carrie Rattle is a Principal at, a website for women focused on mind and money behaviors. She has worked in the financial services industry for 20+ years and hopes to inspire women to better prepare themselves for financial independence. Read More