The Genetics of Saving

[Meadbh]

A retirement blog that I follow has discussed this recent article from Sweden. Unfortunately I don't have access to the original manuscript, but here is a summary of the findings.

https://growthecon.wordpress.com/2015/03/08/genetic-factors-in-savings-behavior/

Basically, genetics appears to be responsible for about 1/3 of the difference in savings between different people. Shared environment obviously contributes, but the saving habits of identical twins are more correlated than those of siblings growing up in the same household.

 

[aaronc879]

My saving habits are definitely not genetic in any way. My parents and brother are horrible with money. I've never been very good at earning money but i'm very good at saving it. Everyone else in my family acts like they are allergic to money.

 

[unno2002]

In essence, my sister is way off on the left, and I am, per friends, tethered of the end of the right wing....

 

[gauss]

My saving habits are definitely not genetic in any way. My parents and brother are horrible with money. I've never been very good at earning money but i'm very good at saving it. Everyone else in my family acts like they are allergic to money.

But can it skip a generation? In both DW and my families, Grandparents - frugal / Parents - not so much.

-gauss

 

[Meadbh]

But can it skip a generation? In both DW and my families, Grandparents - frugal / Parents - not so much.

-gauss

This line of research is in its early stages, but clearly the savings gene is not autosomal dominant. Like heart disease, cancer, etc, it is probably a genetic predisposition.

 

[MichaelB]

A retirement blog that I follow has discussed this recent article from Sweden. Unfortunately I don't have access to the original manuscript, but here is a summary of the findings.

https://growthecon.wordpress.com/2015/03/08/genetic-factors-in-savings-behavior/

Basically, genetics appears to be responsible for about 1/3 of the difference in savings between different people. Shared environment obviously contributes, but the saving habits of identical twins are more correlated than those of siblings growing up in the same household.

This is an interesting topic, thanks for posting it along with the links. A link to the research is here. From the abstract

Genetic variation explains about 35 percent of the variation in savings rates across individuals, and this genetic effect is stronger in less constraining, high socioeconomic status environments. Parent-child transmission influences savings for young individuals and those who grew up in a family environment with less competition for parental resources. Individual-specific life experiences is a very important explanation for behavior in the savings domain, and strongest in urban communities.

 

[FI by 2024]

My savings rate is nothing like my family. My dad planned to work until he died, so here he is at 77 still working. Never saved a penny. My brother would like to save, but "can't" because he always needs a new toy. And my twin? She doesn't save anything because she is convinced she will die in her 40s and therefore not need savings. We do die young in our family, but it's funny how that caused my dad and sister to save nothing and it motivates me to save as much as possible so I can have at least a taste of retirement before kicking the bucket!


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[Meadbh]

The plural of anecdote is not data.

https://sites.google.com/site/skepticalmedicine//the-plural-of-anecdote-is-not-data

 

[aaronc879]

But can it skip a generation? In both DW and my families, Grandparents - frugal / Parents - not so much.

-gauss

My Grandparents were more frugal than my parents but not to my level. I'm on pace this year to spend the most I ever have and I should still come in just under $18,000 including State, Federal, and FICA taxes. Without taxes my spending would be under $15K/yr.

 

[Danmar]

Interesting. I wonder if genetic disposition can explain about a third of almost anything? There must be some actions/attitudes that are purely envireonment driven? Can't think of much though.

 

[kcowan]

My mother and older brother were consummate savers. Dad was more prone to spending but he let mom handle the money. I am a planner but will spend money on important items, although I get no high out of buying "stuff".

Although we have owned things like a Cartier watch and a BMW, we no longer spend that way. We have even cancelled our special riders on insurance for jewelry, simply believing we can replace what we really use with the accumulated savings...

 

[Danmar]

My mother and older brother were consummate savers. Dad was more prone to spending but he let mom handle the money. I am a planner but will spend money on important items, although I get no high out of buying "stuff".

Although we have owned things like a Cartier watch and a BMW, we no longer spend that way. We have even cancelled our special riders on insurance for jewelry, simply believing we can replace what we really use with the accumulated savings...

Keith, you got me worried. I think you are a few years older than I, and I am hoping I can still think of things to spend on whenI get older. I understand that tastes change, but do we just get to the point where it all seems like a waste? Hope not.

 

[Donzo]

My Mother was very careful with money, and food for that matter! We would have leftovers til they were gone. I felt guilty asking for new stuff and would get by with what I had. When I got my career job I started saving right away but never skimped on purchases. When I bought something it was quality. I'm glad I had this while young - Always well fed and had what I needed but no excess. Some of the guys I grew up with always had the best of everything in our group. They are successful and flashy but still working. We get together from time to time and 9 years ago when I ERed they thought I was crazy and would end up on the street or worse (to me) back to w@rk now they ask questions and look tired.

 

[kcowan]

Keith, you got me worried. I think you are a few years older than I, and I am hoping I can still think of things to spend on when I get older. I understand that tastes change, but do we just get to the point where it all seems like a waste? Hope not.

Why not? We have had all the stuff we could possibly want. We have had the benefit of disposing of all the stuff our parents clung to. Nobody values it like we did.

For us now, we spend lots of money on experiences, because they are lasting.

Think of when you went to Venice in comparison to when you bought the convertible. Both bring back pleasant memories, but the convertible has probably been replaced by something new. The memory of Venice lives on.

Continue to do both but expect to find experiences take over.

 

[W2R]

My mother was a saver and very thrifty, taking LBYM a bit far sometimes. My father was very careful with his money too, kept track of it, invested, saved, and nearly every penny he saved or earned immediately went into travel. One of my brothers is a former CFO/CPA and saver, and the other is a creative dreamer and not a saver.

I prefer to be a saver. However, I spent some money this summer purchasing my dream house. At this stage in life I would really like the experience of not traveling (after traveling so much in my youth), so I finally decided a few years ago that the best expenditure for me would be a house.

As soon I bank the money from selling my old house, it's back to saving for me.

 

[mickeyd]

I used to be a great saver/investor. LBYM was my guide. Not so sure about my sisters. They may be spenders. I learned by watching my parents pay for Catholic schools and state college for the entire tribe. Dad never made more than $120/week. Must have been smoke and mirrors involved.

Now that I am retired and 70 yo, I can clearly see into the future that I will never be able to sped all that I have accumulated and have coming to us via DB/SS. That is a great relief, so now I tend to not worry about spending or if there will be enough for DW and I in our "old age." Smooth glide path ahead.

 

[Sue J]

I have a strong gene for saving and LBYM, passed on from my father. My sister did not inherit our father's gene for saving. Shiny things and impressing the right people are where her genes lie. Lucky for her, she married a guy who has plenty to share and lets her do her thing.

DH's genes run more toward number blindness and a family history of money being a subject not discussed, so he's glad he has me! (I'm also very glad I have him!) Since he retired I've encouraged him to learn the family finances and he is much more in tune with our household monthly expenses. The kid in him would still rather spend than save but he's making progress

DH has gotten to the point of getting to the end of the month and if he has $3 in his wallet, it's significant. His "hobby" is collecting thrift store junk and the only thing I'm interested in collecting is excess twenty dollar bills. He has to find room for his stuff and dust it, mine all lays flat and neat in a jar.

 

[LinCella]

My father was a self-employed barber and grew up during the depression. He was extremely tight with the money - I had to beg for new school clothes. However, I don't know how much of a saver he was. I know that his entire retirement plan consisted of selling our house eventually. All of my two of my brothers and I are terrible savers. My eldest brother had a family and so learned to save. I think my reaction was to his stinginess, though he always told me to save 10% of what I earned.

I'm trying to save more but my dog has had many health issues since 2008 and she is my biggest expense. I'm happy to help her as she is a huge part of my life, but it can zap the budget!

 

[Totoro]

As a friend of mine says: Babies, Boats and Beasts can kill any budget

 

[rodi]

My mother was dollar conscious, my father downright stingy... Mom was a SAHM for many years and given an "allowance" to feed the family and provide sundries... If she had extra, she got to "keep" it. As a home-ec major in college - she was awesome at stretching a dollar but providing good healthy food. As the youngest of 3 kids I never had new clothes, but that was ok. My dad managed to save enough that we all had (state) college paid for, including living expenses, and he and mom had plenty to retire on. I paid attention, and after some mis-steps in my 20's started practicing what they'd showed me.

My sister was a bit of a spenderina (to use Walt's term) in her 20's - but switched to frugal pretty fast when she realized her husband could outspend her even more. She maintains the household finances and has them back on track.

My brother was another story. He would have died with significant debt if he hadn't inherited from my parents 2 months prior to his death. As it was, he broke even in his death... He was not a good saver, had a wife (for a while) who could spend like crazy, got involved in "money making" ventures like collecting beany babies. He didn't get the gene.

 

[Nemo2]

For us now, we spend lots of money on experiences, because they are lasting.

+1 I always thought the object was to buy ('need') less and less 'stuff'.

 

[amyj05]

This is interesting. I never really thought about saving being genetic before. My parents are pretty frugal and strong believers in saving. Several years ago, I heard my dad say "It's not how much you make, but how much you save that's important." The older I get, the more I understand how true this is. My brother spends almost everything he makes and saves virtually nothing. I try to save as much as possible and spend as little as possible. My sister isn't an extreme spender or saver. We were all raised in the same environment but have different outooks on spending.

 

[Midpack]

DW's parents frugal out of necessity, DW frugal.

My parents frugal, so am I, but NOT sister - though she finally learned late in life. Guess the research linked in OP proves sister is adopted, who knew? I will let her know we're on to her...thanks for the insight.

 

[Walt34]

Interesting, I never thought about it being genetic in origin. My two sisters and I are all financially conservative but no one would call us misers. I always attributed that to growing up near-poor. Now I hear that perhaps it is genetic too.

 

[aja8888]

...(snip)....growing up near-poor. Interesting, Now I hear that perhaps it is genetic too.

Yes, I have to agree.....I was born into a poor family. Even my sisters were born poor too. Come to think of it, so were my cousins. Must have been genetic and maybe also influenced by those old eastern Pennsylvania coal mines. No one saved much back then, especially since work was scarce and what was there, paid very little.

I escaped, the rest stayed behind. Compared to many of my well-to-do neighbors and select friends, I still feel poor, even though I am much better off than the rest of the family. Old habits, I guess.