Can Being Agreeable Lead to Financial Problems?
New work suggests agreeableness correlates with debt and savings.
Posted April 8, 2020 | Reviewed by Devon Frye
Your personality reflects the tuning of your motivational system. So, it shouldn’t be too surprising that personality characteristics predict some aspects of success in different domains. For example, conscientiousness reflects (in part) people’s motivation to complete the tasks they start, and so it isn’t surprising that more conscientious people tend to do better in school than less conscientious people.
One of the more interesting findings I have seen in this arena looks at the relationship between money and the trait of agreeableness, which reflects the degree to which a person values being liked by others. I have written in the past about research demonstrating that disagreeable people tend to make more money in the workplace than agreeable people.
A paper in the March 2020 issue of the Journal of Personality and Social Psychology by Sandra Matz and Joe Gladstone suggests that more agreeable may be more prone to have financial problems than less agreeable people.
Using several different data sets, these researchers looked at the relationship between measures of financial well-being and agreeableness. Some of these data sets used the actual levels of savings people had or their likelihood of having financial problems (like going bankrupt or paying late fees on credit cards). Other data sets used self-reports of the amount of savings. The findings were similar for both kinds of measures.
The general finding of these studies was that people who make a lot of money tend not to suffer many financial hardships, and so there isn’t much relationship between agreeableness and savings rate, debt, or bankruptcy for these individuals. However, people who do not make a lot of money show a stronger relationship between agreeableness and financial difficulty. At lower levels of income, more agreeable people have lower levels of savings, higher levels of debt, and a greater tendency to go bankrupt than less agreeable people.
Why does this happen?
There are many potential explanations for the relationship between agreeableness and financial problems. Agreeable people might give too much money to family and friends, which can cause problems. Agreeable people might not advocate for themselves enough, which could lead them to be passed over for raises or promotions. Agreeable people might also care more about social interactions than about money, which might cause them to save less and can lead to debt in hard times. All of these possibilities may play a role—they are not mutually exclusive.
Interestingly, Matz and Gladstone did two studies in this paper in which they looked at the value that agreeable people give to money. They observed that (like the other studies I described), more agreeable people tend to save less money than less agreeable people. More agreeable people also rate the importance of money to them as lower than less agreeable people. Using statistical analysis, the researchers demonstrated that this difference explains part (but not all) of the difference between people in the amount of money they save.
What does this mean?
If you’re an agreeable person, you may emphasize the importance of your social relationships over money. In general, that is probably a good thing. But, if you don’t make much money, then it is important to develop some habits to save more and spend less to protect yourself from economic shocks (like the one we are experiencing in the Spring of 2020 as I write this blog entry). The benefit of creating good habits around money is important for agreeable people because those habits are actually consistent with not caring much about money. The more disciplined you are about saving more, the less time you actually have to spend thinking about money.
Matz, S.C. & Gladstone, J.J. (2020). Nice guys finish last: When and why agreeableness is associated with economic hardship. Journal of Personality and Social Psychology, 118(3), 545-561.