Your money habits: nature or nurture?

By Jennifer Goforth Gregory

When we returned from a recent family vacation, my 11-year-old daughter's carry-on bag was crammed with colorful trinkets that she had purchased with her vacation money. My 9-year-old son, on the other hand, boarded the plane with pockets full of cash that he had decided not to spend and instead save for an iPad mini.

I have always been fascinated by the nature vs. nurture discussion, especially when it comes to spending habits. My kids are 19 months and 17 days apart (not that anyone counted) and have been raised in the same middle-class house where we try to instill good money habits. But each of their attitudes toward money has been apparent since they were preschoolers.

When my daughter received money for her third birthday, she immediately launched a campaign for one of us to take her to the toy store right that minute. And even as a toddler, my son put any money he was given directly into his piggy-bank.

The power of DNA

Recently I stumbled upon a study backing up what I have observed in my own kids. A 2011 study of 15,000 sets of twins by finance professors at the University of Washington and Claremont McKenna College showed that a high percentage of identical twins had the same investing patterns as each other -- even if they were raised apart. The researchers concluded that genetic factors account for one-third of an investor's behavior on average.

But even if our genes shape much of our money personality, that doesn't mean spenders are destined to a life of debt and savers can't learn to loosen their purse strings a little. For those who inhabit the far ends of the spectrum, here are three strategies for moving toward the middle when it comes to spending and saving:

• Acknowledge your tendencies. If you know you are a saver or spender at heart, and you suddenly try to become the exact opposite, the shift may be too dramatic to sustain. By knowing your money style and structuring your life to emphasize your strengths and minimize your weaknesses, you can work toward more realistic ways of meeting your financial goals.
• Make small changes. Brainstorm a few small changes and resolve to do one thing each week outside of your comfort zone. Again, the key is to be realistic. If you tell yourself not to eat any of the chocolate cake in the fridge, you may eat the entire thing when your willpower crumbles. But if you let yourself have a reasonably sized slice at an appropriate time, you may find it easier to avoid binging. Similarly, a spender might commit to using a couple of coupons at the grocery store this week, while a saver could try out a new restaurant -- no coupon required.
• Listen to the opposites in your life. Some of us are blessed to live with someone who has the opposite money personality of our own -- perhaps a spouse or child. When my daughter asked for new video-editing software, I was tempted to lecture her about money not growing on trees. But when I asked about her reason for wanting it, I learned that she was very interested in videography and wanted to make a movie for extra credit. By understanding the rationale behind her spending, I have come to understand her better -- and even temper my own extreme saving habits.

Whether you feel genetics or experience has formed your attitude toward money, achieving your financial goals -- such as paying off your credit cards or building savings for retirement -- is a matter of discipline. But the better you understand your predispositions, the more you can use them to your advantage.