How Being a Middle Child Affects Your Finances
Stop agreeing to pick up the check every time already.
This article originally appeared on Money.
Friday is National Middle Child Day. You didn’t know? That’s because you were probably too busy applauding the latest achievement of your eldest or spoiling the youngest one to notice.
Stereotypes aside, psychologists have long known that birth order tends to produce some distinctive personality traits among siblings, and those behaviors can affect everything from your choice of career to your willingness to invest in a start-up. Middle children have a reputation for being outgoing and sociable, for running from conflict and seeking compromise. Those can be terrific assets at the Thanksgiving dinner table, but they may not do your finances any favors. Here’s how some common middle-child traits can affect your bottom line.
Middle children tend to be the social butterflies in the family and are driven by a need to belong to a group. Wanting to be liked above all else can present a problem if a steady stream of social engagements, or the compulsion to treat your friends at happy hour, takes a toll on your budget. Since middle children tend to exhibit lower self-esteem, they need to be mindful to avoid overspending for the sake of appearances or indulging in budget-busting retail therapy. Focusing on people and ideas rather than details is a related middle-child trait, and that big-picture view can be a drawback when it comes to things like sticking to a budget or making sure the bills get paid on time.
Middle children are more likely to want to smooth things over rather than risk rejection or make waves by asserting themselves. This conflict-averse nature can lead to middle kids being overly generous. For middle children who come from families of habitually poor money managers, this can be even tougher: Many are more likely to put themselves out financially before they would turn down a plea from a cash-strapped parent or sibling.
Being a “people person” has career implications, too: CareerBuilder found that middle children gravitate toward careers in public service and caretaking jobs. “Middles are flexible, team-builders, independent, yet also social. They don’t need to be micromanaged… but would not be so good at work where they’re isolated,” Katrin Schumann, co-author of The Secret Power of Middle Children, told Psychology Today. Their empathetic natures can also make them pushovers as managers if they’re not careful, she added.
A cavalier attitude about money can hurt you when it comes to spending, but it also has some surprising benefits when it comes to retirement savings. For starters, although jobs like teachers, firefighters, and nurses often don’t pay very well, the plus side is that they’re among the last in the country with pensions. Middle children are also less cautious when it comes to their investing choices than their first-born siblings are. The older brother or sister might pull down the larger paycheck — and in fact, CareerBuilder did find that first-borns are most likely to earn six figures — but when it comes to investing their 401(k), the middle child can more easily stomach the ups and downs of the market. “First-born were less likely than the later-born to have a majority of their portfolios allocated in stock,” a study on birth order and investing risk found.
Of course, take these characterizations with a grain of salt. There are plenty of middle children out there who broke the mold: Famed investor Warren Buffett didn’t build his fortune by being cavalier with his money, Microsoft founder-turned-philanthropist Bill Gates certainly doesn’t lack for management chops, and someone describing Republican presidential nominee Donald Trump probably wouldn’t use the phrase “conflict-averse.”