Kids and Money: Nature or Nurture?

What Are the Chances a Random Child Grows Up to Be Good with Money?

I’m a big fan of the podcast Diary of a CEO with Steven Bartlett. Two recent episodes really got me thinking.

The first was about alcohol. The expert, Sarah Wakeman, highlighted how some people are more naturally prone to addiction than others. This got me thinking: how much of our desire to spend money or take financial risks is ingrained in us from birth?

The other episode featured Morgan Housel, author of The Psychology of Money. In the episode, he discusses how the habits that lead people into financial trouble are often so deeply ingrained that they become very difficult to change.

Together, these ideas paint a potentially bleak scenario, that some people are naturally inclined to overspend or take financial risks, and even if they realise the consequences, it may be very hard for them to change.

I therefore wanted to understand more about the role of Nature and Nurture. What impact do they have when it comes to the chances of a child being good with money when they grow up?

The Case for Nature

There’s clearly a strong case for nature playing a big role in our attitudes toward money. We’ve all seen (or been part of) families where two siblings, raised in the same environment (i.e., similar nurture), have very different financial behaviours. One saves everything; the other spends it all.

If someone is more naturally inclined to spend or take risks, this could lead to overspending and, eventually, financial stress.

Of course, this isn’t always the case. Some natural spenders may learn to manage their urges. Likewise, some natural savers may still encounter financial problems. But overall, if you’re born with a tendency to spend, you’re at a disadvantage.

So, what are the chances your child is a natural spender or saver? I used to assume it was 50/50. But evidence suggests it’s not. In fact, a child is more likely to be a natural spender. Estimates range from 60% to 70%. Oh no! Why is this?

Evolution Plays Its Part…

There is some evolutionary rationale behind our tendency to spend or take financial risks. In evolutionary terms, “survival of the fittest” meant that those with power or status had access to food, protection, and mates. We're still wired to seek power and status, and in today’s world, we often chase those things by spending money. So, we buy the car, the clothes, the house, not just for function, but for status.

Another evolutionary factor is our natural focus on short-term outcomes. Not long ago, our ancestors were focused on surviving each day - finding food, staying safe - rather than planning years ahead. That short-term mindset still exists and contributes to our natural preference for immediate gratification.

So, nature isn’t doing our kids any favours when it comes to growing up financially healthy.

The Case for Nurture

As mentioned, siblings raised in the same household can turn out very differently when it comes to money. Does that mean nurture doesn't matter?

For most children, there is little or no intentional nurturing about money. So, they learn about money from what they see, not what they’re taught.

This is where the story gets even more bleak (sorry!) as many kids are unintentially nurtured into poor money habits.

Let’s look at three key things most kids often observe about money:

1. Money Is Only for Spending

If parents don’t talk about money, kids assume it’s just for spending because that’s all they see. Their brains hardwire that “money = spending.” And while that’s partly true, it leaves out the essential habits of saving, investing, and giving.

Yes, they might learn these concepts later in life, but changing habits is much harder as an adult.

2. Parents Not Talking (or Talking Negatively) About Money

If money is never talked about, kids assume it's a taboo topic, like swearing. This can lead to fear or shame around money, and a reluctance to learn about it.

Even casual throwaway lines like “Money doesn’t grow on trees” can instill a scarcity mindset or suggest that money is somehow bad or out of reach.

👉 Read More: Avoid These 3 Money Sayings

3. Companies Are Nurturing Your Kids to Spend

Companies spend billions (collectively) marketing to kids. They’re experts at it. If parents don’t actively nurture their children to manage money wisely, they’re effectively outsourcing that role to advertisers, who have one goal: get your kids to spend.

👉 Read More: 5 Tricks Supermarkets Use To Get Us To Spend More

Nature + Nurture = Trouble

Taken together, nature and nurture seem heavily stacked against kids developing healthy financial habits. Based on the research, there’s a 60–80% chance that a random child will grow up with poor money habits.

I wouldn't be surprised if this percentage increases over time due to increased pressure to spend from social media and the fact that kids are growing up in a cashless world.

👉 Read More: Kids in a Cashless World: 3 Dangers Parents Need to be Aware Of

But Here’s the Good News!

That 60–80% figure assumes one critical thing: that the child receives no intentional financial education.

Studies show that intentional parenting or teaching can completely override these tendencies. Kids who grow up in households that talk about money, model good habits, and provide financial education are much more likely to become financially capable adults, even if they’re naturally spenders.

👉 Read More: Financial Education Program for Schools

Yes, it might take more effort if they’re hardwired to spend, but the habits can still be taught.

Some key habits include:

• Saving a small portion of their money consistently

• Learning to spend wisely (not to impress others)

• Delaying gratification

As parents, we can’t leave our child’s financial future to chance - the odds are not in their favour. Even if they get good grades and land high-paying jobs, they can still face financial stress without strong money habits.

The earlier you start nurturing these habits, the better. A Cambridge University study found that many money habits are formed by age 7! That means changing them later is possible, but harder.

👉 Read More: Age-by-age guide to teaching kids about money

Getting the Right Balance

This blog has talked about spenders and savers in very binary terms. But ultimately, we want kids to balance spending and saving.

• Spenders should enjoy spending but learn to save a little.

• Savers should feel free to enjoy their money sometimes without guilt.

That balance is the key to being financially healthy and eventually wealthy.

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Bonus (Song - “Odds Ain’t in Their Favour”): A subscriber put this blog into an AI song generator. It’s very impressive - check it out here

Conclusion

Without active involvement, most kids (60–80%) will default to poor financial habits. Not because they’re lazy or irresponsible, but because nature and society are nudging them in that direction.

It's crazy that based on the above that most schools are still not teaching kids about money. Kudos to the schools that do have a financial literacy program!

As a parent, you can change the script. Here’s how:

✅ Talk openly about money, normalise it.

✅ Encourage saving a small portion of all income.

✅ Show them how money can grow, even in small amounts.

If you're unsure where to start, check out my online course.

And of course, gifting them a copy of Grandpa’s Fortune Fables is a fun and powerful way to teach the Three Rules of Wealth and help them build a financially healthy and happy future.

If you want to help reduce the statistics shown in this blog, share this blog with other families and encourage your kid's school in implement a financial education program.

Thanks for reading!

Will

p.s., If you have read, and enjoyed, my book Grandpa's Fortune Fables, it would be amazing if you could leave a review on Amazon to help increase awareness of financial literacy to more families.