A financial psychologist explains why humans are 'naturally wired' to be bad with money

ABC

You may have figured out by now that your money problems are the result of your upbringing.

In fact, the attitudes and beliefs your parents held about money while you were young has a profound effect on your relationship with money as an adult, according to research by Brad Klontz, a financial psychologist, author, and cofounder of financial-consulting firm Your Mental Wealth.

"Very often when I'm talking to people ... they're like 'Oh yeah, I have all this fear about money, I never really thought about it but my mom always told me you can't trust people with money, and as I think about it, this thing happened in her life ...'" Klontz, who has conducted nearly a dozen studies on the topic, told Business Insider.

"All the sudden the light bulb will pop on for people as they realize that they're just the next actor in this very often multi-generational pattern that's been passed down," he said.

Still, Klontz said, our parents' behaviors aren't entirely to blame. Our biggest money problems as Americans are that we're spending too much and saving too little, he says, and these problems can be traced back even further than our parents' or grandparents' attitudes and beliefs.

In fact, it's in our nature to be bad with money, especially when it comes to saving for the future.

Klontz explains:

"We're also naturally wired to do things wrong around money, so it's inherent in our neurobiology ... We're not wired to save for the future, that's a new concept in our evolution.

"For the vast majority of our history we lived in hunter-gatherer societies, where resources were plentiful and all you could take with you is what you could carry, so we're not really hardwired to collect more than we need for the next day or week.

"So the concept of delaying gratification and saving for the long, distant future is just not something we are wired to do."

But until recently, Klontz said, that behavior was acceptable. In America, companies have historically provided pensions and Social Security meant to supplement our savings and take care of our retirement needs. That's no longer the case, he says.

He continued:

"In the past few decades the entire system has shifted under our feet. A perfect storm has been created with Americans living longer, the solubility of Social Security being questioned, and the responsibility for retirement savings being placed solely on the individual.

"Without conscious effort to override the natural live-for-the-moment impulses of our hunter-gatherers brain, and without significant changes in our financial beliefs and behaviors, a large number of Americans are at significant risk of financial insecurity and poverty in their later years."

Indeed, a recent Prudential Investments survey revealed that 54% of pre-retirees have less than $150,000 in their employer-sponsored retirement fund, and the same percent have no idea how much they actually need to survive throughout retirement.

So, as Klontz mentioned, it takes a "conscious effort to override" these natural tendencies so that we can disassemble our "erroneous" beliefs about money and begin to reform our behaviors.

NOW WATCH: This is how much you need to earn to be in the top .01% of every state