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I’ve written before that I’m an introvert. My personality has controlled my social life for as long as I can remember. I’ve always preferred spending time alone to spending it with others. But I’m convinced my personality has affected many aspects of my financial life as well.
Some HumbleDollar readers might be familiar with the Myers-Briggs personality test. Years ago I took the test. I am classified as an INFJ. When I read a summary of the traits typically exhibited by people with this personality type, I knew the test results were spot-on.
One of my favorite quotes about INFJ personality types reads, “With their rich inner lives and their deep, abiding desire to find their life purpose, they don’t always fit in with those around them.”
Bam! I couldn’t have described myself better if I had tried.
So how do I think personality might drive financial decisions? For myself, my deeply introverted personality means I’ve never spent much money on social activities. Going out to eat, shop or attend a concert holds almost no appeal to me. Give me a few books, a laptop computer and a remote control and I’ll be happy for days…no, make that weeks.
I’m a perfectionist. My attention-to-detail is so extreme I often consider it a fault. I’m goal-fixated, as long as the goal involves something I’m passionate about.
From a financial standpoint, those qualities mean I’ve spent far too many hours of my life balancing checkbooks to the last penny. It means I fret about the balances of my retirement accounts far too often. And when it comes to spending money, I’m obsessively frugal unless it means buying something related to dogs. Then all bets are off.
Do you think your personality drives some of the decisions you’ve made in your financial life?
Is an introvert person the same as a shy person? They may be related in terms of speaking or having a conversation with other people.
Introverts need time alone to recharge. Social interactions wear them out. But they aren’t necessarily shy. I’m an extreme introvert and if I’m talking about something I’m passionate about—like dog training—I’m quite animated and outgoing. But if I have to be in a group of people with whom I share no common interests, I will be the one sitting in the corner, looking at her watch and figuring out how to escape without anyone noticing…
Thanks Kristine for your response. I can see that there are differences as you explained. I also like dogs. My oldest son gave us a Boston Terry dog because he was moving to another state and he couldn’t take care of him. He prefers to be around me rather than my other son and my wife. I wonder if dogs have a preference among family members.
I always appreciate your posts, Kristine. As a fellow introvert, I can relate to so much of what you share.
Thanks for the kind words. Being a lifelong loner, I can definitely relate to finding someone to relate to :-).
I think social media forums have been a fabulous thing for introverts. We can get out and ‘socialize’ on our terms and from the comfort of our own homes.
Great topic Kristine. I always enjoy and appreciate your writing, so thank for this.
I had the opportunity to take the Myers Briggs several times over my career, associated with various leadership and management classes. We were told that a significant portion of Lockheed Martin employees were ISTJ. My scores indicated borderline E / I.
The best thing I learned was to approach the assigned type as a preference. As Kathy says below, it’s how we recharge our energy. But we can, and often have to, express the opposite sides of our personalities. The best Myers Briggs teach I encountered said he was an off-the-charts Introvert. But he chose a career in consulting and teaching. After 2 days of teaching professionals – he said he would lock himself in his office for a few weeks.
Understanding personality types also helped me work with, and later manage, a wide variety of professionals. Pushing people to spend too much time in the opposite side of their preference was usually counterproductive. I found it was better to respect their preference, and help them when they needed to do something outside their comfort zone. Engineers often have to give presentations to large groups. This was an area where working with colleagues could really help.
I worked with 1000s of engineers one 40 years, and their interest in, and facility with, finances varied greatly. I would say the vast majority had the intellectual capacity to understand the important parts of personal finance, but many had no interest, and some of us had a keen interest. I never wondered whiter there was a correlation to personality type, but it’s an interesting question.
Thanks for your kind words Rick. I always appreciate friendly feedback!
Having worked at a college for many years, I’m quite sure many of the best professors are both introverted and conscientious. Most professors are so profoundly interested in their research, they love to share their knowledge with anyone who will listen.
As with many introverts, I have no problem speaking to people as long as I’m talking about something I find interesting. I do, however, immensely dislike having to spend any length of time chatting about the weather, people I don’t know or just about any type of sporting event (with the exception of mixed martial arts).
I will happily give a two or three hour talk about dogs to a group of people. But afterwards I will be emotionally (and physically) exhausted.
Thinking of my tax clients, it seems to me that those most engaged with the management of their investments do tend to be introverted. Further I have observed that many artistically creative people don’t seem to put much effort into financial strategies. Many of my building trade worker clients, who I contend are creative sorts, fell into this category.
People I perceived to be more analytical did way better with both finances and preparing for their tax prep appointment. An example of those folks would be engineers.
I suspect there are a number of factors that come into play with regards to personal finance management skills. I think personality plays a big role. Perhaps the type of job one has does as well–I’m thinking of the person who is employed in a job with some type of pension.
I know when I was employed at my first job–a job that came with a pension–I assumed there was no need for me to save any of my own paycheck. Looking back, I realize just how flawed my thinking was.
I suspect the answer is yes and every other aspect of our lives as well.
i have read everything you have written on HD. I doubt there is any writer here who has been as candid in revealing details about their lives, financial and otherwise. Such openness seems to be the opposite of being an introvert.
Not being a psychologist I’m probably wrong, but I would expect an extreme introvert would also be very private as well.
Extroverts gain energy by being around people and are less happy alone. Introverts lose energy being around people and need time alone to recharge. It has nothing to do with privacy, or with liking other people. Even before my hearing deteriorated I didn’t like big gatherings, but I do enjoy spending time with one or two friends.
Curiosity caused me to research this a bit. Supposedly there are different types of introverts. One type is very private and reluctant to share much about their personal lives.
Pretty sure Kristine is not that type.
What???!!!!
Different kinds of introverts???!!!
That. Is. Crazy. Talk.
I haven’t done any extensive research myself, but I’m going to guess there are also extroverts who are private and reluctant to share much about their personal lives.
You described me to a tee. I guess I’m an introvert.
Privacy isn’t mentioned in any of the personality trait tests that I’ve seen.
I share many of my financial details for a few reasons. Jonathan has often suggested that the sharing of such details makes for articles that are more relatable to readers.
I mostly share because I think my stories illustrate that planning–and luck– both factor into financial success. I think my stories may connect with a different set of readers than some of the other authors do. That’s what makes HumbleDollar such a wonderful, and unique, resource!
I think having the right temperament (personality) may be the most critical factor for investing success.
I tend to be risk-averse so it took quite awhile before I started investing money in the stock market. I suspect I’m still too conservative with my investments, but it allows me to sleep well at night.
People are complex. I am risk averse in some areas of my financial life, but when it comes to the stock market, the opportunity cost of not being invested is what causes me to lose sleep.
On the other hand, if I started a business and didn’t have a regular paycheck to pay my bills, I would get ulcers. 🙂
My risk aversion to the stock market lessens with each day I see my account balance increase. When it takes a deep plunge, I have a harder time staying calm, but I have learned to basically ignore the bad markets and focus on the good. I do, periodically, transfer some of the money I have invested in stocks and move it over to my guaranteed return accounts. Just moving a small amount over helps keep me calm.
Kristine, for a long while I didn’t think much about my innate personality. Introspection just wasn’t popular in my circles. I can look back now and realize that what I thought of as deficiencies were just my personality traits. But at the same time, I had goals for myself that were hindered by those traits. So I worked hard to gain the interpersonal skills and other qualities I was lacking.
These days I can discern a struggle between my inner self and a more conscious part of my mind. Sometimes I’ll choose to follow one, and sometimes the other. Even so, there’s not a dichotomy, but more of a blending. I’m sure there are other times when my inner self makes a stealth decision without consulting my will.
Yes, I think personality influences finances, as well as happiness. But, as Jonathan pointed out in his last article, I think there is room for the influence of choice.
By the way, I appreciate all the comments so far, and I plan to check out parkslope’s link.
Personality researchers generally agree that there are five major personality traits (the Big 5): extroversion, conscientiousness, agreeableness, neuroticism, and openness to experiences.
Not surprisingly, conscientiousness (planful, goal-oriented, persistent) is positively associated with wealth while neuroticism (anxiety, worrying, guilty, irritability) is negatively associated.
The relationship between extroversion-introversion and financial behavior is less straightforward. Extroverts are more successful in sales and mangerial jobs that require extensive social interaction.
https://psycnet.apa.org/record/1991-22928-001
On the other hand, a recent study found that low-income extroverts spent more on items and experiences that reflect higher status than low-income introverts, which the authors hypothesized was a means of compensating for their perceived shortcomings. Because extraverts are more socially active it makes sense that they may be more concerned with social appearances.
https://www.psychologicalscience.org/news/releases/low-income-extraverts-spend-more-on-status-than-introverted-peers.html
While your introversion has clearly influenced your financial behavior, I think the fact that you are highly conscientious may have had an even stronger influence.
Thank you for this response–so much interesting information.
I spent thirty years working in laboratories. Probably 60-70% of that time was spent alone or with only one other person. I can’t even imagine working in a job that required extensive social interaction.
You might enjoy taking the Big 5 personality test. I scored in the 13th percentile on Extroversion which is in line with the fact that I am an introvert who hates group activities and small talk but enjoys one-on-one interactions–especially with fellow dog owners.
https://openpsychometrics.org/tests/IPIP-BFFM/
Thanks for the link. I scored in the first percentile on Extroversion…but 97th percentile for Conscientiousness! I think that pretty well sums up my personality.
Thanks to @parkslope for the link. I had previously done the Myers-Briggs test and was evaluated as ISTJ. I’m not quite as much of an outlier as Kristine for the Big 5 personality test, scoring 4 on extroversion and 80 on conscientiousness. But I wonder how stable that result is (i.e., if I took the test 6 months from now or on an atypical euphoric or down day, would my score be similar?). As far as how my personality impacts my financial decisions, I find myself to be far more conservative than I probably should be given that I will have a Federal Government pension.
Interesting question. I am an INTJ, and tend to score far over on the introvert scale. Back when Myers-Briggs was popular I read that the US is majority extrovert, while the UK is majority introvert. I did move somewhat towards the middle while I was in therapy, and I am certainly acting more extrovert now I have moved to a CCRC. I’m not sure it has affected my money habits – I am naturally frugal, totally uninterested in following the stock market and a happy proponent of benign neglect and “set it and forget it”. I do reconcile my accounts once or twice a month but I don’t pay much attention to my net worth except at the end of the year or when it seems a good time to rebalance.
I have yet to have my extroverted side come out (if I even have one). One of the things I enjoy most about retirement is having more quiet time. It will be interesting to see if that changes at some point. I wonder if anyone will ever open a CCRC that is made up exclusively of introverts–or better yet, introverted dog owners!
Well, as I have explained to an introverted friend who is dubious about moving to a CCRC, there’s no reason he couldn’t come out just to pick up food and mail.
Absolutely. I think personality is key to what kind of financial decisions a person will make. I’m sure there’s many more, but what first comes to mind is whether a person is future oriented or solely living in the present. Can they budget their money through the month, or do they spend it quick and run out before the month is over. Also, are they impatient and want immediate results, or can they exercise the patience to plant a tree knowing it might be 10 before it’s big enough for someone to enjoy. I suspect many don’t see the value in small regular savings that build up over time. Many more personality aspects come to mind, but this is 2 that popped up in my mind when I considered your question. Unfortunately, I suspect being linked to one’s personality probably makes it more of a challenge for someone to overcome. In my case, I was lucky that my basic personality was future oriented and patient, so managing money has always been easy for me since I didn’t have to overcome my basic personality. I’m sure for some it’s much more of a challenge.
Thank you for your thoughtful comment! I am definitely someone who is both future-oriented and patient. It has served me well when it comes to finances.
Kristine, I’m likewise an introvert and yes, it probably has affected my financial decisions. I’m similarly a bit obsessive in how I manage our investment accounts and, even though I know that at some point, due to age, I’ll need the help of a financial advisor, I still resist that notion.
And heck yes, I’d much rather spend time with my wife, our pooch, some good books, movies, or my laptop, than get out and mingle at various social activities. The idea of spending a lot of money on parties, restaurants, entertaining and the like is anathema to me.
I do believe in supporting worthy charitable causes, and #1 on my list are those that help man and woman’s best friends, the doggies!
I adore dogs and donate regularly to two charitable organizations that involve dogs. One is run by the Lutheran Church Charities, and it’s their K9 Comfort Dogs, a fleet of Golden Retrievers who get deployed to sites of natural disasters or mass shootings to provide comfort to those grieving (or to local schools and hospitals if there’s not a big event).
The other is a wonderful organization in rural Georgia called Freedom for Fido in which volunteers build fences so that dogs with low-income owners can have a yard to run in instead of being attached to a chain all day long.
Both organizations have wonderful social media presences, so I get to watch videos of happy dogs getting to run free for the first time or adorable Golden Retrievers cheering people up. ❤️
What wonderful organizations you have found. I need to look those up!
I love this! It’s always so nice to find people with similar traits. Living where we do, it sometimes feels like everyone around me is an extrovert. It seems as though there are non-stop activities, day and night, 365 days a year. Acckkkk!
I sometimes wish I were emotionally strong enough to volunteer at a dog shelter but alas, in addition to all my other personality quirks, I’m an HSP (highly sensitive person). The easiest way to explain that particular trait is to tell people I bawl whenever one of these Subaru ads shows up.
If I volunteered at a shelter I would either: a) have 100 dogs living with us in a matter of a few days. b) be crying uncontrollably every time I left.
I’m with you on that. I really admire the great folks who work or volunteer at the shelters, and it does require a special kind of strength.
That’s a great Subaru commercial! I hadn’t seen it before, and believe it or not I likewise drive a silver Impreza (although mine is a hatchback). Subaru has long had a special connection with dogs, and in my book that’s a big plus.