Nature vs. nurture: The psychology of saving money

Why is it easy for some people to stick to a budget and save money, while others struggle? Is there such a thing as a “frugal” gene?


Tags: Budgeting, Savings
Published: September 14, 2020

Your beliefs, attitudes and behaviors are shaped by a combination of factors. Psychologists use the terms “nature” and “nurture” to describe this complex equation.

Nature: Genetics and brain chemistry

The human brain has two seemingly contradictory reactions to the act of spending money: a pleasure response and a pain response. Which reaction you feel more strongly is influenced by your genetics.

When people are actively deciding to purchase something they want, parts of the brain responsible for happy emotions are activated. Even the anticipation of shopping can release dopamine, triggering a reaction that’s biologically similar to falling in love.

On the other hand, financial loss can cause a distress reaction in the insula region, the part of the brain that processes physical pain.

While everyone experiences both emotions at times, the level to which you feel each has a genetic component. Some people get a bigger thrill out of the happy emotions of making a purchase, and they are more likely to become spenders. Others, who feel the pain of financial loss more strongly, are natural savers who find it easy to set aside money. Scientists have also identified a gene that makes self-control easier; roughly one-quarter of people are born with this “saver” gene.[1]

Research shows that about one-third of our financial behavior can be explained by genetics.[2] For the rest of the story, look to nurture.

Nurture: family and early experiences

Early life experience and parents’ or caregivers’ attitude toward money play an important role in shaping financial behavior and beliefs.

Growing up, you learned the practical aspects of managing money from adults in your life. You likely also absorbed their beliefs and attitudes toward money.

Children observe and internalize their parents’ emotional responses to money, such as money-related stress or conflict. Healthy habits like following a budget, saving for the future, and giving money to charity can also be passed down.

Value-based beliefs like “Money is the root of all evil,” “Money is the measure of success” or “Money represents power and freedom” can get passed down directly or indirectly. Values are also influenced by social and cultural factors that extend beyond the family.

How to retrain your brain

If you’re naturally inclined to be a spender, there’s bad news: The release of dopamine is short-lived, and you need to repeat the behavior (i.e., buy more stuff) to keep the happiness flowing. The good news is, you can retrain your brain to find ways to make saving rewarding or make spending less enjoyable.

Listen to our webinar “Train your brain for smart financial habits” to learn science-based techniques to help you stick to a budget, reduce impulse spending, stay on top of your credit and more.

If you’re trying to shake negative influences from your family background, take heart. The influence of parents on financial behavior diminishes over time, and you can actively choose to write your own script.  


[1] Shefrin, “Born to Spend? How Nature & Nurture Affect Spending Habits,” 2013
[2] Cronkvist & Siegel, “The Origins of Saving Behavior,” 2015