Bankrate.com recently looked at the impact of birth order on personal finance in the article “How birth order can affect your finances.” It takes an interesting look at how being the oldest, youngest, or somewhere in between can impact your personality, and in particular your financial personality. Of course, there are exceptions to these observations, but they certainly make you think. They give you a chance to take a look at your financial personality – and understanding your financial biases will take you a long way toward controlling your personal finances.
In Chapter 1 of Turning Money Into Wealth we introduce the 10 Principles of Personal Finance, and Principle 9 on that list is Mind Games, Your Financial Personality and Your Money. This principle focuses on the fact that because of the way we are wired, we all have built-in biases that we don’t know about that have an impact on how we make our financial decisions. If you understand these biases, you can control them, and if you recognize what your financial personality is, you can take it out of the process and avoid some of the pitfalls you’d otherwise be subject to.
Class discussion and assignment:
1. Read the articles, “How birth order can affect your finances” from bankrate.com and “Does birth order affect your finances?” from the Boston Globe website boston.com. What are the financial traits of oldest, youngest, middle children? What are you, and do you fit in with these descriptions? Be prepared to discuss this in class.
2. What does the marketwatch.com article, “How birth order can affect your job, salary” say about your future? Why does this make, or not make, sense to you? Be prepared to discuss this in class.
3. After reading the introduction of Principal 9 Mind Games, Your Financial Personality and Your Money in Chapter 1 of Turning Money Into Wealth, can you think of some things from your childhood that might have had an effect on how you handle your money?