Saver or Spender – is it genetic?

29 Nov 2019

Saving A study shows that we are genetically predisposed to spend or to save. We inherit ‘money’ genes that determine our spending/saving habits. Only 25% of us are born with a gene that tells us to stop buying things we don’t need. - Gulf news

Society unfortunately, strengthens this spending habit by having discount shopping vouchers, reduced sales and telling us what we need to buy to feel good about ourselves or to fit in.

Luckily, although we can’t get rid of this inherited behaviour, we can be trained by good parenting, that will teach us to form savings habits from a young age. Children follow by example, so if you as a parent are very free with your purse strings, then your children will adopt the same habit. This is not a legacy that we want to leave our children.

To encourage them to develop a “save first and then spend” attitude, is a way to ensure that they see the importance of saving, not only for those special buys, but also for long term goals such as retirement and deposits for home loans.

 

Tips to cultivate good saving habits with your children.

  • Give your child an allowance from a young age to teach them about money management
  • Teach them to make a budget for their allowance and prioritise spending
  • Include essential purchases in their allowance like toiletries, clothes etc. – this exposes them to the cost of living
  • Make them save a portion of their allowance for a special purchase
  • Educate them on retirement savings and awareness from an early age
  • Teach them savy financial principals
  • Lead by example, living on credit sets a bad example
  • Encourage part time jobs to show the importance of working for something instead of being given anything they want
  • Get your child a good old fashioned piggy bank so they can physically see their money growing when they save

 

Chat to your deVere adviser about setting up a savings plan for your children so they can have a boost in life, whether it is for education or to buy a house or start a small business. [email protected]

Try the new Catalyst app It offers exposure to world class funds at a fraction of the cost and no monthly commitment. You can contribute whenever you have some spare cash.

 

Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere adviser for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.