Is There a Thrifty Gene?

Have you ever wondered why some people seem to be able to easily spend money on a whim, yet others are more frugal in their spending habits?

Even siblings, close in age, raised during the same time period, in the same environment, by the same parents, attending the same schools are often different in their levels of thriftiness.

For example, my brother is only 18 months older than I. We were both raised in the 1950’s by parents who were in their early adulthood during the Great Depression. Our parents were thrifty. Mom never considered brand name purchases when there was a cheaper alternative. Dad took his bologna sandwich to work for lunch every day instead of buying lunch (and even refused to buy a nickel candy bar to add to it).

Yet, my brother’s spending habits are so different than mine. He seems to let money just flow through his hands, constantly treating himself (when he has the funds) to things without consideration of future needs or wants. I, on the other hand, have difficulty spending money, even though we currently have more than enough to last a lifetime.

My hairdresser tells a similar story about her siblings – some won’t spend, others will.

Millionaires stay thrifty.

At least some people who become millionaires retain their frugal ways. We don’t hear about a lot of them, because, although they are rich, they aren’t famous.

However, you can read about millionaires who think food tastes better if someone else is paying for it, or who only buy used clothing, or who continue to avoid debt.

Then there are the stories on Money  that detail how some of those even on the Forbes 400 list maintain their thriftiness, from Zuckerbergs $30,000 car to Buffetts 1958 family home.

Habit or trait?

But is thriftiness a habit or a genetic trait?

Many things we once believed were the result of our conscious choices have turned out to have a strong basis in our genetic makeup. When old folks lost their memories and ability to recognize familiar people in years past, we thought it was the result of aging, now we know that some inherit a tendency to have Alzheimers. Age related blindness (macular degeneration) is now known to be mostly inherited.

High blood pressure and high cholesterol in some are almost predestined to happen based on genetic makeup.

Personality traits also seem to me to be somewhat genetic. After all, some babies are born smiling laughing and reaching out to people. Others are more reserved, subdued and shy. In fact a long term study found that some personality traits were found more than 50% of the time to be the same in twins, even though raised apart.

A more recent study summary posted by Science Daily reported :

“Genes play a greater role in forming character traits — such as self-control, decision making or sociability — than was previously thought, new research suggests.”

But what about a frugality gene – is it possible that our tendency towards thriftiness (or being a spendthrift) could be genetic?

There are scientists who actually study how are genes are related to our money. A relatively new field called neuroeconomics (which combines neuroscience, economics and psychology) is indicating that there may be a basis for genetic disposition towards frugality.

George Lowenstein, a professor of economics at Carnegie Mellon University is one of the people who studies frugality.

In a study he and the other researchers proposed:

“… that an anticipatory pain of paying drives “tightwads” to spend less than they would ideally like to spend. “Spendthrifts,” by contrast, experience too little pain of paying and typically spend more than they would ideally like to spend. “

Scott Rick (University of Michigan Ross School of Business and Ph.D. holder in behavioral decision research from Carnegie Mellon) was one of the researchers in another study which used functional magnetic resonance imaging (fMRI) to examine what goes on in our brain when considering the price of a desirable item.

The subjects saw a series of products and prices (like a box of chocolates) while the fMRI was in progress. Three parts of their brains were watched: the nucleus accumbens, which lights up in anticipation of pleasure; the medial prefrontal cortex, which fires to help when balancing gains and losses; and the insula, a part of the brain that registers pain.

Seeing products they liked caused the subjects pleasure centers to light up. When shown the price later for that item, if the price was higher than the person was willing to pay, the pain center activated, whereas if the price was lower, the part of the brain that balances gains and losses was fired (possibly indicating they were deciding to buy the item) and the pain center was less active.

While not proof that we are genetically disposed towards thriftiness, to me, the study links the genetic makeup of our brain cells to the amount of pain we experience when prices are too high.

We have a choice.

The bottom line, is that scientists are still exploring the idea that economic decisions may be inherited.  The jury is still out.

But, even if the way we spend or save our money is linked to certain genes, I (like my hair stylist when I asked her) believe that we still have a choice. I believe that we can be trained (or train ourselves) to display the appropriate amount of frugality (or ability to spend) for the situation at hand.  We can choose to develop the habit of thriftiness.

Scientists have found that those diseases which have a genetic base, may or may not be triggered in a person – depending on what that person chooses to do in his or her life.

I believe the same will prove true of any inherited spending tendencies. So, even if I feel uncomfortable spending, I can still decide to go ahead and part with the money. Likewise, even if I want to buy, buy, buy, I can still control the instinct to do so.

Do you think thriftiness can be inherited?

Is a spending money fast the right move for you?

If there’s a time of year that makes you feel that you’ve definitely been overspending, it’s the holiday season. Even when you try to be frugal, and keep the materialism to a minimum, spending still manages to creep. From the gift exchange you feel you have to participate in, to the food you purchase when you entertain, to the decorations that you couldn’t pass up because they were on sale, it seems as though it’s especially hard to keep your spending under control this time of year.

It’s especially hard for me to keep a lid on my spending during the holidays, no matter how hard I try. As a result, come January, I’m ready to never spend again. There’s a reason that so many people decide to go on a “spending money fast” after the holidays are over. But is a spending money fast the right move for you?

What is a spending money fast?

A spending money fast is a conscious effort to dramatically reduce where you spend money. In fact, much as you avoid eating and drinking for a set period of time when going through a fast, you decide on a period of time in which you won’t spend any money. Usually, a month is the desired amount of time, since it is a meaningful period of time, and it can help you develop new habits to replace the spending habit that you might be stuck in.

With your spending money fast, you continue using your money on must-pay items, like your mortgage payment or rent, your bills, and making your debt payments. You should also purchase groceries as needed. Everything else is usually cut out, unless an emergency comes up, such as the need to repair your car, or replace a broken appliance.

Your spending money fast should also consider cutting out extravagant spending, like junk food at the store. The idea behind a spending money fast is that you only purchase true necessities. So, you might need produce for this week, but you don’t need to buy popcorn or candy. Many people also use a spending money fast as a good time to make use of their food storage. If you are concerned about some of your pantry items reaching an expiration date, your spending money fast can include these items. You won’t have to spend as much at the store, since you can use your food storage to prepare most of your meals. If you wait until later in the year, your spending money fast can coincide with harvesting your garden in order to reduce your need to buy food.

Some people make it a point to go on a spending money fast three or four times a year, just to make sure that they refocus their priorities and reduce the chance that lifestyle inflation will creep in.

Is a spending money fast practical in your situation?

For my family, a spending money fast isn’t really practical. That’s because my husband won’t get on board. He’s not really a big spender, but he likes to buy extra foods at the store sometimes, just to try them, and he enjoys being able to purchase collectibles when he wants, without having to worry about the timing. A spending money fast isn’t going to work in my case — unless I’m willing to to just make it a personal spending money fast.

A spending money fast might not be practical if you have obligations coming up, or if you know that you will be spending money on something important to you soon. An upcoming wedding that you will have to travel for, or if you know that you are going to make other purchases soon, a spending money fast might not make sense, since you won’t be able to keep with it.

On the other hand, a spending money fast can be a good idea if you are trying to figure out what really matters to you. If you want to see what you can do without, and what you would like to cut from your budget, a spending money fast can be a way to see what you truly miss in your spending, and what you don’t care for. Plus, a spending money fast can help you set new priorities, and reduce your overall spending.

Finally, if you are determined to get out of debt as quickly as possible, a spending money fast can be a way to kick off your efforts. A good spending money fast, with the savings going toward your debt, can boost your morale and help you see good results.

What do you think? Have you tried a spending money fast? Did it work?