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18th Nov 2015

Did you know your birth order can affect your future bank balance?

Trine Jensen-Burke

Are you a good saver and make smart financial decisions? Then you might also happen to be the first-born in your family?

Or alternatively; are you the youngest in the family and a bit of a spender? That might not be all by coincident if this research is to be believed. According to a study published in the Journal of Financial Therapy there might be a strong link between someone’s birth order and how that person makes financial decisions.

“First born children tend to be more achievement-oriented, and therefor more likely to be über-organized savers,” says Lynnette Khalfani-Cox, co-founder of Ask the Money Coach and author of College Secrets.”

Being organized helps you in managing your finances well, and first-born children tend to have a more financially conservative outlook according to Khalfani-Cox.

Rachel Cruze, author of Smart Money, Smart Kids, thinks that the greater level of responsibility that falls to oldest children, as well as only children, translates to a responsible way of handling money: “Being more risk-averse can allow eldest children to save more money, as they’re less likely to blow their money on unnecessary purchases or take risky investments.”

Middle children, on the other hand, tend to be more balanced with money, as they are with a lot of other issues too. Middle children will think twice before spending, for example, but won’t be overly rigid about a budget,” says Khalfani-Cox. Cruze agrees: “Middle children can be a little more flexible and free-spirited,” she says. “There are many free sprits who love to have fun but also understand the importance of planning for the long-term.”

But what about the babies of the family, the ones who are known for always being a little indulged? “In general, the last kids in the family tend to be indulged and spoiled more as parents get more permissive,” says Khalfani-Cox. “This can translate into a child being more indulgent and growing into a person who spends more.”

The youngest siblings tend to also be more generous givers, according to the experts. “Since they aren’t thinking as much about the long-term, they don’t have a problem letting go of their money,” says Cruze. “This can be shown in a positive light as they’re giving.”

It’s almost like spending is part of their happiness, Khalfani-Cox concludes. “By spending on others, they can enjoy the ride with the person that they’re helping.” 

What do YOU think? Does this all ring true for your family? Join the conversation with us on Twitter at @Herfamilydotie