4/18/2012 5:33 PM ET|
How birth order affects finances
Not only does it affect personality and career choice, your spot in the family can also affect your spending. Here's what you should know about yourself -- or your mate.
Have younger siblings? Chances are you're more interested in intellectual, cognitive careers -- such as medicine, law, accounting and engineering -- that offer larger paychecks than your younger brothers and sisters have. They may be drawn to artistic and outdoor-related careers.
Chances are you also had your fair share of fights in the back seat, too.
Besides determining who gets the window (or the middle) seat, your birth order also has a lot of pull with your finances. Derrick Kinney, an Ameriprise financial adviser at Derrick Kinney & Associates in Arlington, Texas, says your birth order can affect your relationship with money and how adeptly you manage your credit score. Being the oldest, the youngest or somewhere in between can affect how high your credit score might surge or how much debt you're likely to rack up.
A few tricks of the trade can help keep your birth order from dragging down your credit score and keep you from piling up a mountain of debt. Here's a look at what you need to know to stay out of the financial middle seat.
Firstborns are typically fiercely responsible, says Dr. Soroya Bacchus, a psychiatrist in Los Angeles.
"They're the most punctual about paying bills, because they love to be seen as stable and dependable," says Bacchus. "They won't let financial details like payment due dates and avoiding unnecessary over-the-limit fees fall through the cracks."
Bacchus says firstborns are also phenomenally organized and "keep their finances in order." So they often have great credit scores.
"Thirty-five percent of your FICO score is based on paying bills on time. So being responsible helps your credit score," says Chris Dlugozima, a certified consumer credit counselor at GreenPath Debt Solutions in New York.
But all that perfectionism and drive of being the first in the birth order can backfire.
"More often than not, being a perfectionist leads to burnout and giving up or setting unrealistic financial goals," says Kinney. "That may sabotage your finances."
Temper your traits: Instead of setting an unrealistic long-term goal like tripling the amount you put into your 401k every month, Kinney suggests setting attainable short-term goals.
"Middle children are inventive, natural problem-solvers. They grow up thinking they can handle anything themselves, including money problems," says Bacchus.
"Being inventive can result in constantly moving debt around between different cards through cash advances and balance transfers," says Dlugozima.
Bacchus says it also makes middle children prone to secrecy. "Inventing" ways to a pay a bill or to afford an impulse splurge can create the need to cover up -- or ignore -- financial troubles.
A secretive side can mean middles are more likely to hide financial troubles such as unpaid bills and accounts sent to collection from their spouses. They believe they can fix the problem themselves. Dlugozima says when a middle child and his spouse seek a mortgage or loan together, a middle's in-the-dark mate may be blindsided with a rejection because of the money-hiding middle's secret poor credit scores.
Temper your traits: Kinney says soul-searching helps resist the temptation to be secretive.
"If it's embarrassing or disappointing to not have enough money so you get creative, (then) instead of secrecy, work together to create a mutual plan to turn your finances around," he says.
More from Bankrate.com:
VIDEO ON MSN MONEY
Not even close to the truth. I am the Youngest of 5 and I am the only one who is financially stable. It's not about birth order, it's about choices. No matter what order you were born, you chose you financial fate.
This is 100% wrong in regard to the family I grew up in, and with my own children.
It all actually works in the opposite.
who writes this crap...rates up there with the dummest artical i have wasted time reading.
BUNK. My older sister is not any better at managing money than me or the other two siblings in our family. We all learned from our parents to be responsible and pay our bills on time. AND to save. Pointless article.
I'm the middle child. We are the ones no one pays any attention to at all. I think of myself as the surviver. I'm always employed, never in trouble , own a home, "the only one of the kids who does". But it is never as important as the baby's issues, and the oldests need to control everyone. I like just floating along in my world.
I definitely agree with the other posts. This article has it wrong. This article doesn't represent me and my siblings, nor does it represent any of my friends and their siblings.
Seriously, where does MSN find these writers? And how minimal do their qualifications have to be?
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.