Published in: Research | Oct. 4, 2019
By: The Ascent Staff
Nature and nurture give rise to our individual lives and personalities. Once we leave the house and gain financial independence, however, certain traits and quirks can manifest through the various ways we handle money and organize finances.
After surveying over 500 people across the country who fell into IBM’s Big Five personality models (agreeableness, conscientiousness, extraversion, openness to experience, and neuroticism), we were able to understand exactly how the world’s most common personality traits influenced monetary outlooks and habits. Here’s how your character and quirks may be determining your financial behaviors.
Before diving into the financial discrepancies between the Big Five personalities, it’s important to understand exactly what these personality traits mean. According to IBM, these five categories of personality are the most widely used models for describing how a person engages with the world around them.
The first of these five traits, “agreeableness,” refers to somebody’s kindness and affection. Those scoring high for this trait tend to be more compassionate, while those with a lower agreeableness score would tend toward apathy. The second major trait, “conscientiousness,” refers to a person’s strong ability to control their impulses (if they score high for the trait). A low conscientiousness score would result in poorer impulse control as well as a lack of attention to detail.
Extraversion is perhaps the most often mentioned in casual conversation of any of the Big Five personality traits. A high-scoring extravert feels recharged and energized by the company of others, whereas someone scoring low in this area would gain energy through seclusion and time alone. A high score for the fourth personality trait, “openness to experience,” results in a wide variety of interests and the tendency to try new things, whereas a lower openness to experience score would demonstrate limited interests and more habitual inclinations.
The fifth and final personality trait is neuroticism. A high neuroticism score triggers more frequent unpleasant emotions, such as sadness and anxiety. A lower score indicates lower stress and levels of depression. All of these personality traits play into our daily lives, which include financial habits and attitudes.
When it came to current financial standings, more than half of our respondents looked at the glass as half full -- 52% of those surveyed felt satisfied with their financial situation. On the other hand, the remaining 48% expressed a feeling of dissatisfaction with the amount of money they had and earned.
Looking only at respondents who scored exceedingly high for each trait (in the 90th percentile, for our study’s purposes) we were able to group participants into specific personality-based categories. Thereafter, we started looking at how happy each of these groups was with how much money they made. After all, it’s often your outlook more than your bank account that can determine this satisfaction.
Extraverted participants were the most likely personality group to be satisfied with their financial standings. In fact, 67.4% felt satisfied with their financial well-being. As we’ll see later in this study, this may have to do with their ability to earn more money, but it may also have to do with their personality’s ability to gain energy from the company of others. Sociability may encourage lucrative networking opportunities, raise increases, or other financially satisfying experiences.
Those who scored high in openness to experience (the creative types) were the least likely to feel satisfied with their financial well-being. Perhaps their innate creativity feels stifled by a lack of financial freedom, or perhaps their creative endeavors are simply costing them too much. That said, 50.9% of those polled still felt content with the amount of money they had.
To determine the impact the Big Five personality traits had on finances, we first looked at the most classic indicator of financial standings: annual salaries. We compared respondents who scored particularly high for each personality trait (in the 90th percentile) as well as the respondents who scored particularly low for each trait (below the 20th percentile).
On average, those scoring high in neuroticism had the highest average salary of any personality trait: They earned an average of $55,200 per year. Recall that a high score in neuroticism is often related to high levels of stress and anxiety. The jobs they gravitate toward may induce even more of these negative emotions, which may or may not be emotionally offset by augmented salaries.
The lowest earners, on average, were those who scored high for “agreeableness.” Because these personality types are known for being particularly cooperative, they may be less likely to push back against unfair wages or assert themselves in contractual negotiations. Whatever the case and whatever the salary, many Americans still live paycheck to paycheck. It’s of the utmost importance, then, to choose a savings account wisely and continue to add money to it whenever possible.
Once again, we uncovered key financial differences between each end of the personality spectrum after comparing the highest and lowest scorers within each personality trait. The largest difference occurred between high and low scorers for extraversion. Highly extraverted respondents earned an average of $12,700 more every year than their introverted counterparts. The sociability and assertiveness associated with extraversion are also often necessary for successful salary negotiations.
Conscientiousness had the most minor influence on average salary. High-scorers for conscientiousness earned an average of $5,100 less every year than those determined to be the least conscientious. Because conscientious and nonconscientious people differ in their organizational skills and attention to detail, there may be certain jobs that work better for these types of people than others.
High scorers for conscientiousness, however, were two times as likely to ask for a salary raise than those who scored high in extraversion, agreeableness, and openness to experience. Wherever you skew on the various scales of the Big Five personality traits, salary supplementing is universally possible (without salary negotiations) by responsibly investing and growing a savings through a money market account.
Overall, most respondents considered themselves to be savers: 61.1% described themselves this way. Only 28.5% of respondents called themselves spenders. These numbers varied drastically, however, when we segmented by those who scored exceptionally high for each of the Big Five personality traits.
Those scoring high in conscientiousness were more likely to be savers than any other personality trait. Nearly 67% of these high scorers saw themselves this way, compared with just 50% of high-scoring extraverts. High-scoring extraverts were the most likely to consider themselves as spenders. Evidently, being more social can come with a higher price tag.
An impressive three-quarters of respondents managed to save money from each of their paychecks. On average, these biweekly savings amounts were $311. Just as important as saving money is choosing the best place to put these savings. We continued to dig deeper into the way savings amounts changed between personality types.
Those who scored low for the conscientiousness trait saved the most, on average. They managed to save an average of $373 from each paycheck. On the other hand, those who scored high for the same trait were the most likely of all the traits to save money from each paycheck.
Those with low openness to experience scores saved effectively as well: They added an average of $353 to their savings accounts with each paycheck. These personality types tend to demonstrate a wide variety of interests, which they will be more easily able to pursue with larger checking and savings accounts.
Differences in openness to experience scores led to the largest differences in savings when compared to other personality traits. Those with distinctly low openness to experience scores saved an average of $170 more from every paycheck than those who scored high for openness to experience.
Neuroticism scores made the smallest difference when it came to saving portions of paychecks. Only a $14 average savings difference was found between low and high neuroticism scores. Apparently, differences in mood swings and anxiety levels have relatively ineffectual influences on a person’s desire and ability to save money.
Of everyone surveyed, 74% felt that they followed some sort of budget. Depending on your salary, living situation, and a host of other factors, your budgeting needs and attitudes may change. Nonetheless, simply establishing a plan and budget are the first crucial steps to maintaining a healthy checking account.
As you may have been able to predict, those who scored in the 90th percentile for conscientiousness (those with good impulse control) were the most likely to follow a budget. On the other hand, those who ranked high for openness to experience (likely to be creative and try new things) were the least likely to follow a budget: Only 58.9% of this group followed a budget. While trying new things is not inherently bad, it’s important to find ways to try new things without sacrificing a monthly budgeting plan. Those with this personality trait should carry their creative instincts over to the budgeting realm as well.
High scorers for neuroticism, agreeableness, and extraversion fell in the middle of budgeting habits. 71.7%, 72.7%, and 77.8% of these traits followed budgets, respectively.
No budget plan is complete without the consideration of paying credit card bills on time and in full. Those who scored in the 90th percentile for neuroticism understood this concept the best: 61.3% of high scorers in neuroticism reported paying their credit card bills in full. Remember that neurotic tendencies relate to high levels of stress. Although this is an unpleasant emotion, it may have a lesser-known benefit of encouraging financial responsibility. Those who scored high in openness to experience, however, weren’t far behind: Nearly 60% of those with this trait also paid their credit card bills in full.
And those leaving behind a credit card balance? The agreeable ones. Nearly 55% of those who scored in the 90th percentile for the agreeableness trait didn’t pay their bills in full. If you find yourself in this balance-owing camp, you may want to look into the various balance-transfer credit card options that are available to you.
As tax season draws nearer, you may want to note how your personality could potentially be linked to your tax-paying habits. Extraverts -- 76.1% of them -- were the most likely to file their taxes on time. Perhaps their social skills have enabled them to more easily find the appropriate resources and accountants for doing so. They were also the group most likely to negotiate lower prices for big-ticket items.
Only 51.8% of those with strong tendencies toward openness to experience filed their taxes on time -- a big jump from the extraverted group. In this specific financial area, being overly open to experiences may mean becoming unnecessarily accommodating of late payments, or in this case, late taxes. The “openness to experience” group was also the most likely to be paying for convenience rather than taking the less expensive route.
By and large, respondents (70.5% of them) felt that their purchases were driven by rational motives as opposed to emotional ones. Only 29.5% felt that their purchases were emotionally driven. Among the Big Five personality traits, there weren’t high levels of variance in the areas where rationally motivated shopping did occur, especially in comparison to their emotionally motivated purchases.
All personality types were most likely to shop rationally when it came to considering the economy or price of the item. Things like increased profit and increased production mattered far less in terms of rationality to all five personality types.
Emotional-based purchasing, however, presented differences between the personality types. “Agreeableness” most often led to emotional “pleasure” purchases, whereas extraversion correlated the most strongly with comfort and convenience. Conscientious shoppers, however, felt emotional purchases were made most often when it came to their health. Because this group tends toward good impulse control and behaving dutifully, it may make sense that they feel strong emotions toward needing to make responsible health purchases.
While you may not skew within the 90th percentile of the Big Five personalities, those who scored exceptionally high for these traits still reflect some of the financial habits you may be displaying. If you consider yourself to be an extravert, perhaps you’ve already mastered the art of negotiation. If you would describe yourself as neurotic, you may already know what it feels like to have maxed out a credit card. The deeper roots of your personality can surface through a variety of mannerisms and quirks when it comes to finances.
If you are unsure of what personality type you may be, perhaps a deeper look at your financial attitude and habits can shed some light. Most importantly, however, recognize that no personality type makes you exempt from the need to be financially responsible. Simply start with the legitimate, expert-based research and resources always available to you at The Ascent. From credit card selection to maintaining your investments, our team of experts will steer your financial life in the right direction.
For this study, we polled 509 people via online surveys. Of those surveyed, 45.3% identified as female, and 54.7% were male. Additionally, 63.4% of respondents were millennials, 26.2% belonged to Generation X, and 8.3% identified as baby boomers. The remaining 2.2% were a part of either Generation Z or the silent generation. To ensure data accuracy, an attention-check question was administered in the questionnaire. Participants who incorrectly answered the attention-check question or entered inconsistent data throughout the survey were disqualified.
We defined the Big Five personality traits by collating several definitions from credible sources on the topic. An abbreviated version for the Big Five personality model was administered in the survey to assess personality traits for each participant (The Extra-Short Form of the Big Five Personality Traits-2, Soto & John, 2017). All data were collected and scored according to the method outlined in this paper. The participants that exhibited a clear predisposition in each dimension were then grouped for analysis. All data were normalized along a standard Gaussian distribution and respondents who scored at or above the 90th percentile of a particular trait were labeled as “high” in that characteristic. Likewise, respondents were grouped and labeled as “low” in a specific trait if they scored within the 20th percentile for that dimension.
These data were gathered via a self-reported survey. Self-reported data are often limited in their accuracy by myriad issues, like a participant’s tendency to misremember, exaggerate, or portray themselves in the most positive light. Moreover, while responses were normalized, these data were not tested for statistical significance and are presented as a purely exploratory analysis. and therefore are based on means alone. In addition, the Five Factor Model of personality (like any personality model) also has its own limitations and criticisms, including assertions that it is too limited in scope and too driven by data alone, lacking a unified underlying theory.
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