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Being kind and trusting can have financial costs, study says

Researchers found that agreeableness was associated with indicators of financial hardship, including lower savings, higher debt and higher default rates

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Man paying his bill with credit card“[The relationship between agreeableness and financial hardship] appears to be driven by the fact that agreeable people simply care less about money and therefore are at higher risk of money mismanagement,” said Joe J. Gladstone of University College London (Getty Images/mihailomilovanovic)

Do nice people really finish last? If recent research is any indication, they just might—at least when it comes to money management.

In a paper published in the Journal of Personality and Social Psychology, Sandra C. Matz of Columbia Business School and Joe J. Gladstone of University College London explore why agreeable people tend to have lower credit scores, save less and are more likely to default on loans.(Agreeableness is one of the “Big Five” traits that researchers use to describe personality. The others are openness to experience, extraversion, neuroticism, and conscientiousness.) 

“We were interested in understanding whether having a nice and warm personality…was related to negative financial outcomes,” said Matz in a release.


For the study, Matz and Gladstone analyzed data collected from more than three million participants using various methods, including two online panels, a national survey and bank account data. 

In a sense, their research is a natural follow-up to previous studies linking the Big Five traits with finances. For example, as the researchers point out, neuroticism has been linked with higher debt rates, and agreeableness has been associated with lower credit scores and income. In fact, a 2011 study showed that agreeable workers earn much less than those who are “meaner”—and the gap is especially wide for men. 

But while it might be easy to conclude from the 2011 study and others that negative financial outcomes are a result of more cooperative negotiation styles, Matz and Gladstone show this is not necessarily the case. 

“[The relationship between agreeableness and financial hardship] appears to be driven by the fact that agreeable people simply care less about money and therefore are at higher risk of money mismanagement,” said Gladstone.


The researchers also found that not all agreeable people are at equal risk of suffering financial hardship. As Gladstone pointed out, “The relationship was much stronger for lower-income individuals, who don’t have the financial means to compensate for the detrimental impact of their agreeable personality.”

To underline the connection between agreeableness and finances, the researchers compared publicly available personality and financial data from two areas in the U.K. with similar per-capita income levels. The city that scored significantly higher on agreeableness also had a 50 per cent higher bankruptcy rate.

“Our results help us to understand one potential factor underlying financial hardship, which can have serious implications for people’s well-being,” said Matz. 

But even though the correlation is interesting, it doesn’t have to be predictive, according to Doretta Thompson, CPA Canada’s financial literacy leader.   

“Even if money isn’t one of your top priorities, you can create balance and ensure your financial security by learning the financial basics and developing healthy financial habits. You might even want to take inspiration from conscientious people,” she said.  “As the researchers point out, studies have linked conscientiousness with increased savings, debt avoidance and more positive attitudes toward saving. Be the agreeable person you are. Agreeableness doesn’t have to dictate your financial future.”


Want to learn more about the links between personality and financial capability? CPA Canada has studies on the subject. It also has a number of resources that can help with budgeting, saving and retirement planning, and holds an annual Mastering Money conference (this year, it will take place in Ottawa, November 7-8).   

To plan a financial literacy session in your community, see Planning for retirement.