Are Youngest Children Bad with Money? What Your Birth Order Really Says About Your Spending Habits

I grew up the oldest of five kids, and unlike many, we didn’t receive an allowance. However, we were amply supplied with funds thanks to birthdays, holidays, graduation presents and the good old-fashioned summer job. Though we all grew up in the same house, I couldn’t help but notice our different approaches to finances. As the oldest child, I was the most judicious, squirreling it away for those “just in case” moments. While all my siblings possess a fairly responsible approach to finances, having been inculcated with the save-for-a-rain-day approach, as adults, we definitely manage the day-to-day differently. For example, while I’m a “saver,” I also love the occasional splurge. Meanwhile, my fourth-youngest sibling is frugal to the point that he could drive a cardboard box as long as it had wheels and power steering. (I’ll pass, thanks.) The youngest has the most robust stock portfolio of us all, while the true “middle” child has the most fun. In many ways, I think my siblings and I fall into the birth order theory tropes. But there are other ways in which we’re anomalies. So, does the order in which you’re born actually have scientific bearing on your finances? I spoke with a psychologist to find out.   

Dr. Sanam Hafeez is a New York City-based neuropsychologist and director of Comprehend the Mind, a psychological practice that treats learning disorders, anxiety, depression and other psychopathological disorders. Dr. Hafeez obtained her Doctor of Psychology at Hofstra University and completed her post-doctoral training in neuropsychology and developmental pediatrics at Coney Island Hospital.

The Birth Order Theory was the brainchild of Austrian psychotherapist Alfred Adler, a contemporary of Sigmund Freud. As this 2017 paper explains, Adler believed that a large part of someone’s personality development could be tied to their birth order and how that encouraged certain traits. “Adler believed that one’s rank within the family would impact the individual’s experiences, thereby altering the way that individual’s personality develops,” the authors write. “The traits expected for each child are not dependent on their actual order of birth, but rather on the social interactions they experience as a result of that factor”

Adler ranked positions as follows: First Born Child, Second Born Child/Middle Child, Youngest Child, Only Child. Often, but not always, each one will have the following traits, as explained by Dr. Hafeez.

“First-borns are often seen as responsible, reliable and leaders, typically being more achievement-oriented and conscientious due to feeling pressure to meet parental expectations. Middle children are considered peacemakers, adaptable and diplomatic, often developing strong social skills to carve out their own niche because they may feel overshadowed by their older and younger siblings,” she notes. “Youngest children are described as outgoing, attention-seeking and charming, and they might be more rebellious and willing to take risks, having less pressure to conform to parental expectations. Only children are viewed as mature for their age, self-sufficient, and conscientious, often enjoying being the center of attention and having strong intellectual interests due to more direct parental involvement.”

So, according to these traits, what does that mean for your financial life?

“First-borns, often seen as responsible and achievement-oriented, tend to be disciplined savers and careful spenders, influenced by high parental expectations,” Dr. Hafeez says, further explaining that the oldest child will usually exhibit qualities like responsibility and reliability because of said expectations and the caretaker role they assume for younger siblings. That means they’re apt to think about planning for future expenses like university tuition and retirement. If you need someone to spot you $100, chances are, the oldest sibling has it. (But, if they think the $100 won’t be responsibly spent, you can count on them saying no.)

On the other hand, younger siblings, benefiting from the lack of parental oversight, can tend to be more carefree risk-takers. (Hence, perhaps, why my youngest sibling is the most aggressive investor.) “Youngest children may exhibit more impulsive financial behaviors, preferring to spend in the present rather than save for the future, influenced by typically more lenient parental relationships,” Dr. Hafeez says. However, this trait isn’t confined to the youngest child, as a 2024 study found that the risk-taking attitude could be attributed to laterborns as a whole. Middle children may take a more moderate approach, finding an optimal middle ground between saving and spending, doing their best to allocate funds to everyone’s needs. In other words, they’re the one you go to when you need that $100. The youngest may have lost it on the stock market. (Or they could have tripled the investment.)

As for the “Onlies”? “Only children who mature quickly and enjoy close parental relationships often develop self-sufficient and conscientious financial habits, emphasizing security and careful planning,” Dr. Hafeez notes, which likens them to the first born child, who share the traits of discipline and caution.

Sure, like zodiac signs and personality tests, birth order theory is fun—but if you’re panicking because you don’t like what your birth order supposedly says about you, fear not. Nothing is truly set in stone.

“These generalizations do not hold for everyone,” Dr. Hafeez reassures me. “Personality development is influenced by many factors, including individual temperament, family dynamics, parental involvement and cultural context. While birth order can offer some insights, it is just one of many influences shaping personality and behavior.” There are many things, she says, that can affect our relationship to money, among them emotional stability, significant life events, education, peer pressure and cultural norms. And because nothing is permanent, you’re not stuck. It might take some discipline, but it’s never too late to rewrite the script.

“While birth order theory offers interesting insights and can be a useful framework for understanding certain family dynamics, it is not universally accurate,” Dr Hafeez says. “Personality is shaped by a complex interplay of genetic, environmental, and social factors, and birth order is just one piece of the puzzle.”