Struggling to rein in credit card debt or not saving enough for retirement? Don’t just blame yourself for your money troubles. The genes you inherited from your parents may also be at fault.
According to a growing body of research in a field of science called genoeconomics, the size of your bank account — and the amount of credit card debt you carry — may be partially determined by your genes.
For example, in a new paper published this month in the Journal of Political Economy, economists Henrik Cronqvist and Stephan Siegel argue that differences in people’s genes could explain why some people are more likely to save money rather than spend it. “We find that genetic differences explain about 33 percent of the variation in savings behavior across individuals,” write Cronqvist and Siegel, who analyzed the savings behavior of identical and fraternal twins.
The money lessons imparted by your parents may also influence how likely you are to spend or save, the researchers found — at least when you’re young. (Over time, your parents’ influence tends to wear off.)
Environmental factors, such as your family’s wealth, also matter. But certain personality traits — such as your ability to resist temptation — appear to play an especially big role in determining the kinds of choices you’ll make as an adult. And those traits tend to be strongly influenced by your genes. “Each individual is born with a genetic predisposition to a specific savings behavior, an effect that is found not to disappear later in life,” write the authors.
Previous research has also linked genetics to income, investments and even debt. For example, a February 2014 study linked a specific gene — Monoamine oxidase A (MAOA) — to higher levels of credit card debt.
Researchers stress, however, that the growing field of genoeconomics, which studies the association between genes and economic outcomes, is still young and the results from various studies are not definitive.
Your bottom line
While you may be genetically predisposed to overspend, here are steps you can take to overcome your impulses and rewrite your financial destiny.