What Extroverts Do Differently With Their Money
WHY YOU SHOULD CARE
Because your brain might be burning a hole in your pocket.
Everyone has a favorite extrovert. Maybe it’s that girl in the office with purple hair who hollers inappropriate things at the boss and brings mirth and joy to all who know her. Some studies say people like her are happier than introverts, and she may even be better-looking. But the downside to being an extrovert is pricey.
Extroverts spend more and save less than introverts do.
Since extroverts also make slightly more money on average than introverts, they’ve got a bit more to spend, it seems. But new research from Jacob Hirsh, an assistant professor at University of Toronto, makes it clear: In three studies that examined the relationship between extroversion and savings at an individual, regional and national level, he found that in every case extroversion correlates with saving less of what comes in.
Extroverted traits are highly valued in Western culture: Outgoing people are easy to talk to, and they keep the party rolling. “It’s easy to get along with an extrovert,” says Hirsh, who identifies as an ambivert — i.e., somewhere in the middle. The reason extroverts are so talkative and outgoing, he says, “is that they are more sensitive to rewards, and they pursue social rewards with more energy, and that leads to more spending.” He means the cred you get and the friendships you make when you’re always ready to party — and maybe buy a round of drinks.
It’s possible that extroversion doesn’t cause the spending but that both are boosted by some third factor. Hirsh controlled the study for three different related factors — wealth, percent of the population of working age and life expectancy. None of them moved the numbers. He admits there could be some other factor, but if it exists, he hasn’t discovered it yet. Aaron Caycedo-Kimura, a Boston-based artist and self-identified introvert who’s created a series of one-panel comics about the introvert experience, theorizes that it could be about seeking more stimulation. “Extroverts prefer to direct their energy outwards, tend to live large,” he says. “I suppose that could lead to the spending of more money and less savings for a rainy day.”
If nations want to control their spending behavior, Hirsh suggests, they could start with brains — their citizens’. He suggests that regular personality assessments could offer more data into the ways a nation’s psychology is changing and how its spending behavior might shift as well. “We tend to think of extroversion as universally good,” Hirsh says, but the costs can have societal repercussions. If a country wanted to encourage more saving, he suggests, it could start with financial education for the extroverts. Either way, tracking large-scale personality changes could ultimately help steer a nation to be more productive, more innovative or more thrifty.