When money is tight, we tend to assume our choices are the result of thoughtful decision making — a balancing of necessary expenses and proactive budgeting, and we assume our present economic circumstances set the barometer for these choices. But according to one recent study, the secret behind our spending habits isn't found in our checking accounts, but rather, our childhoods.

Researchers from the University of Minnesota and the Massachusetts Institute of Technology, Vladas Griskevecius and Joshua Ackerman, found that people's upbringings affected their spending habits as adults regardless of their current financial status, according to their report published in Psychological Science.

The duo cites an evolutionary compulsion inspired by life history theory, which basically asserts that people with poorer childhoods will act impulsively and prefer quick gratification, while richer upbringings produce adults who prefer delayed gratification and low risk.

To test their hypothesis, the team ran a series of studies that asked subjects to make a financial decision after seeing a collection of images. The subjects were split according to the images they would see: half looked at pictures of broken down buildings, dilapidated houses, and other images associated with recession, while the other half saw neutral images.

Afterwards, the participants were asked to make a financial decision based off two options: they could either have $30 now or $41 33 days from now. They also had to make a gambling decision: did they prefer $30 for sure or want a 54 percent chance of winning $50?

By and large, the researchers found people made decisions according to the financial circumstances of their childhoods. Among those who saw the recession images, people with poorer backgrounds made riskier decisions and showed a preference for immediate gratification. Meanwhile, those from well-off backgrounds elected to wait the month to get paid and took the conservative route, instead of gambling. Those who saw the neutral images showed no preference according to their backgrounds.


Isolating the behavior of those who saw the recession pictures points to a person's childhood as a significant arbiter of future spending habits, the team asserted.

"Taken together, early-life environments associated with high versus low SES (socioeconomic status) appear to sensitize people to adopt different life-history strategies, which are then expressed contingent on proximate resource scarcity," their report states. "These findings also underscore that behaviors that might appear foolish or irrational from an economic perspective can be deeply rational from an evolutionary perspective."

A second study punctuated the team's findings. Participants were asked to read a news article either about the recession or on a different topic. The researchers then had the subjects assess their affinity for luxury goods. Following the trend of the first experiment, the people who grew up in poor families expressed a greater desire for luxury goods after reading about the recession. Both those who grew up with high SES and those who read the neutral article did not report a marked affinity for luxury goods.

The upshot to these studies has its roots in evolution. When confronted with a difficult decision, humans tend to revert back to their instincts. It's what allows us to make important decisions with limited resources, such as judging whether the rustle in the grass was a predator or just the wind.

When the limited resource is the modern invention of money, the researchers find, people rely on the instincts created through their upbringings. Low-income families grow up in areas where puberty happens earlier, sexual activity begins earlier, and impulsivity becomes second-nature. Richer areas prize delayed gratification, the investment of resources for later use, and low risks.

"Some organisms develop fast strategies characterized by a striving for short-term gains without regard for long-term consequences," wrote social psychologist Randy Stein, Ph.D., in Scientific American, "while other organisms develop slow strategies characterized by long-term planning and delaying payoffs."


The researchers concede that their study of 105 participants was relatively small in relation to the larger claims they attempted to make. They cite scant variation in their participants' economically disadvantaged upbringings.

"A wider range of childhood SES may yield more powerful effects of childhood environment," they wrote. "For example, adults who come from extremely poor backgrounds might show strong life-history effects, in which childhood experience powerfully shunts these individuals down faster chronic trajectories that are less responsive to adult conditions."

The influences of environment and genes on life history also demands more research, they noted, as environmental factors could "predispose people to a particular life-history strategy both directly and indirectly."

Source: Griskevicius V, Ackerman J, Cantu S. When the Economy Falters, Do People Spend or Save? Responses to Resource Scarcity Depend on Childhood Environments. Psychological Science. 2013.