When it comes to financial habits and the question of nature versus nurture, which plays a bigger role? We often hear about how our upbringing plays a crucial part in shaping how we treat our money, but then how do some siblings from the same household end up with drastically different habits?
My younger sister and I grew up in the same middle-class household, with the same parents and arguably, all the same privileges. We both got our first part-time jobs around 16 and had the amazing benefit of family members that were willing and able to save for post-secondary education. Yet she has always been a risky spender and I’ve always naturally been a bit of a hoarder when it comes to money.
It’s not uncommon for her to quickly drop a hefty percentage of her paycheck on clothes and a night out as soon as it hits her account. Meanwhile, the majority of my paycheck goes into savings, other than the “safe” dedicated amount I keep around for fun and regular expenses. By the time I was a 21-year-old full-time student, I had about $11,000 saved and was about to start my first RRSP (Registered Retirement Savings Plan in Canada). My sister, who is now about to turn 21 herself and didn’t spend four years full-time in school, recently told me she was excited to have $600 in the bank. She often teases me for being “cheap,” and I tease her for being “broke”. You get the picture.
While I now have a higher paying job (I work in PR and she’s a cook transitioning to bartending), the current wage gap and age difference don’t fully explain our different financial personalities. We both have our strengths and weaknesses, though. Over time, I’ve learned that we’re part of a symbiotic financial relationship. We each have something to offer one another when it comes to money.
How siblings end up with different financial habits
A 2010 study looked at how siblings can develop drastically different financial habits. Their research looked at the financial portfolios of over 37,000 twins in Sweden, as well as a pool of non-twins of the same size.
By comparing the portfolios of people with shared upbringings, they were able to deduce that similarities not explained by their shared experiences were explained by genetic factors. They concluded that about one-third of portfolio behavior was genetically determined and that the genetic factors appeared to be lasting, even as each individual racked up their own unique set of life experiences.
Even though they found one-third of the portfolio behavior to be a result of genetics, this doesn’t necessarily mean that nurture played the more dominant (two-thirds) role. The researches also found that accumulated life experiences eventually replace the majority of the effects of childhood upbringing over time.
Basically, while your genetics won’t change, you are continually having new experiences that impact your habits. Your childhood is an important factor but, over time, other experiences can take a front seat.
So while my sister and I share genetics, obviously those genetics aren’t identical. As people always point out to us, I carry certain traits similar to our mom, while she clearly takes after our dad in certain areas, and vice versa. For example, our mom? Very thrifty. Dad? Not so much. They’re both smart with their money and have their own priorities, but their spending habits definitely contrast.
Numerous studies have found trends between older and younger sibling personalities, too. When it comes to money, older siblings tend to be more responsible and organized with their finances, while the younger child often relies on parents longer and has a harder time setting financial boundaries for themselves.
Of course, this isn’t the case for every family, but it makes sense that birth order contributes to our financial habits. The birth order dynamic surely plays a role in many other parts of our lives too–from our individual career trajectories to our dating tendencies, our social habits, and the type of friends we surround ourselves with (another huge contributor).
I’m no psychologist and personalities are deeply complicated beasts but it’s clear that just because two people come from the same upbringing doesn’t mean they’ll grow up with the same financial habits.
What our differences have taught me
While I may be the family saver and my sister hardly hesitates to pay for piercings and another pair of jeans, this isn’t to say that my financial life is all superior to her’s. I’ve been teaching her some saving strategies, but there are also impactful things she’s rubbed off on me.
For one, she’s taught me to live more in the moment with my money and to not guilt-trip myself for investing in “superficial” things that actually bring joy, like pricier quality clothes, a solid haircut, or an eyebrow tint.
For example, my sister and I are out for an afternoon drink on Cinque de Mayo and we’re seriously craving a margarita, ‘cause why not? We walk into a Mexican cafe and size up the $8.00 margaritas versus the $5.00 Coronas. I immediately second guess my craving and say that maybe I’ll just go for the beer. My sister says to me, “You came in here for a margarita. That’s what you want.”
I got the margarita.
Whether it was directly a result of her influence or not, this mindset gradually took deep root. I started to believe that it was worth spending more money on materials things now and then. While I’ve never had much of an issue spending on experiences like travel or eating out, when it came to possessions, I always felt guilty about it. I’ve now found a better balance.
I also have to admit I haven’t always been the most generous with my money. It took me years to go from feeling anxious about spontaneously treating my mom or friend to lunch now and then to feeling genuinely happy to do so.
My sister, on the other hand, always took the lead in planning Christmas presents for our parents. She wouldn’t hesitate to buy something nice for them even though we really didn’t have to. Even if she had very little money to her name, she would excitedly buy gifts to shower them with that definitely ended up putting a large hole in her account. We’re not a big gift-giving family but these days, I truly get more joy planning out presents for family with her–without the spending anxiety.
Of course, sometimes gift-givers really just want to spend money in general and can use generosity as an excuse to spend. I don’t think that’s true in my sister’s case, but it is something to keep in mind for shopaholic gift-givers.
While my sister’s apparent inability to save will continue to drive me insane until it improves, she has helped me see the value of a dollar beyond that momentarily satisfying uptick on a digital screen. And hey – she’s now set up with manageable automatic deposits into an online bank with a high-interest savings account, so my good habits are rubbing off on her, too.
My sister has reminded me how fortunate I am to have financial freedom and that money can, under the right circumstances, be used as a tool to improve my quality of life in the little day-to-day ways, in addition to the big “preparing for the future” ways.
It’s okay to pay someone to make my eyebrows look fantastic if it makes me feel confident. It’s okay to get the laptop I desperately need to work more efficiently and can totally afford. And when I want the margarita, it’s okay to get the damn margarita.
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