Does your personality affect other areas of your life?
Recently, researchers have been very interested in the “Big Five” personality traits. The traits are openness, conscientiousness, neuroticism, extraversion, and agreeableness. For example, supposedly people higher in neuroticism are more likely to be creative.
A new study by Columbia Business School and University College London have concluded that people higher in agreeableness (a trait associated with kindness) tend to have worse financial outcomes than people who are lower in the trait.
“Previous research suggested that agreeableness was associated with lower credit scores and income. We wanted to see if that association held true for other financial indicators and, if so, better understand why nice guys seem to finish last.” Said Sandra Matz, a researcher within the study.
She and her team analyzed a number of different sources in order to complete the study. They looked at nationally conducted surveys, government data on insolvency rates, bank account data, and numerous online surveys. From the data they drew, they looked at the Big Five personality traits to see how they correlated.
They found that agreeableness was the only trait that made significant correlations with finances. One of the experiments they studied observed people from childhood for the next 25 years of their lives. This experiment found that individuals that measured a higher score of agreeableness early in life were more likely to experience financial issues later in their lives. Therefore, more agreeableness, to begin with, could potentially cause financial problems in the future.
Another experiment they looked at showed that people with higher levels of agreeableness were about 50% more likely to filed bankruptcy due to financial issues.
These instances are not occurring because people that are more agreeable are less intelligent or cannot handle money as well as less agreeable people, but it is because they care less about money and finances. Therefore they don’t handle it as well.
Now, agreeableness didn’t affect financial outcome in every case. It was more likely to affect people of lower income status. People who are high in agreeableness and are of low-income status simply cannot compensate for the impact of their personalities on their financial states.
Studies like these can provide a lot of insight for financial institutions and can potentially help people save money and improve their financial status. Although these studies may seem a bit judgemental, they can offer some good for the big picture of life.