Even Young Kids Show ‘Spendthrift’ and ‘Tightwad’ Tendencies


Professor Scott Rick and colleagues find that children as young as 5 behave much like adults.

Piggy bank

Are you a big spender or a tightwad, or maybe somewhere in the middle? Some experts say spending habits can be determined by a measurable personality trait.

Can that same scale apply to children? A new study from Michigan Ross Professor Scott Rick and colleagues suggests the answer is yes.

The study was published in the Journal of Behavioral Decision Making and recently written up in The Wall Street Journal. Rick conducted the research with U-M colleagues Craig Smith of the Center for Human Growth and Development and Susan Gelman and Margaret Echelbarger of the Department of Psychology.

The researchers asked children aged 5-10 a series of questions about spending and saving to determine their place on the continuum of “spendthrift” to “tightwad.” Then, the children were given $1 they could choose to save or spend. The researchers found that the children’s placement on the scale could accurately predict their behavior.

The WSJ noted that the research has potentially valuable implications for teaching kids about money.  

“For instance, children identified as spendthrifts could be taught about the negative consequences of overspending and about opportunity cost—or how spending now could cost them down the road,” the paper wrote.

Scott Rick is an associate professor of marketing at Michigan Ross.

Read the Wall Street Journal Article

Read the full study

Media contact: MichiganRossPR@umich.edu