Extroverts tend to make more money than introverts. But according to a study published this month, they also tend to save less of what they make.
“Many of the choices that people make are influenced by their personality characteristics,” explained author Jacob B. Hirsh in a July 27 news release. The study appeared in the July 2015 issue of the journal “Personality and Individual Differences.”
Unlike introverts, extroverts gain energy by interacting with their environment and with other people, and they tend to enjoy more stimulating activities. As a result, they’re more likely to spend money on exciting experiences and on maintaining a more lavish lifestyle. They also tend to be more prone to making snap decisions and have a harder time resisting tempting purchases.
Introverts, on the other hand, tend to place a higher value on internal experiences and on quiet activities they can enjoy alone or with small groups of people. As a result, they tend to spend less money on entertainment and on maintaining a certain type of lifestyle — in part because the activities that many introverts enjoy, such as reading, watching movies or daydreaming, typically cost less overall. Introverts also tend to be more deliberative in their financial decision-making, says Hirsh, and don’t react to external rewards as intensely as extroverts, so they have an easier time resisting temptation.
“Extroverts are far more sensitive to rewards, which makes it harder for them to overcome their desire for immediate gratification,” he explained in the release. “When making financial decisions, this can contribute to impulsive spending, higher credit card debts and reduced savings.”
In a 2010 study on how different personality types spend their money when put in a good mood, Hirsh and his colleagues demonstrated that extroverts tend to make more impulsive spending decisions than introverts — especially when they’re feeling upbeat.
Because of how their brains are wired, extroverts also tend to relish their purchases more ferociously, so they have a harder time passing them up. “They like everything in life more,” said Hirsh in a 2010 news release.
Hirsh analyzed various population-level datasets, including the Federal Reserve Bank of St. Louis’ CredAbility Consumer Distress Index and the International Monetary Fund’s Gross National Savings data in order to get a sense of whether extroverted populations as a whole also tend to have lower savings rates.
In all three analyses, Hirsh found that populations with larger numbers of extroverts tend to save less overall. “Just as dispositional preferences for immediate gratification predict impulsive choices among individuals, so too do they predict reduced savings at the aggregated population level,” wrote Hirsh in an earlier version of the July 2015 report.
What it means for you
If you’re an extrovert, you may have a harder time keeping your budget in check since going out with friends and engaging in new experiences typically costs money — particularly if you have a penchant for high-end goods or luxury experiences.
But that doesn’t mean you’re stuck at home each time your checking account gets low. Instead, try looking for free or less expensive activities, such as hiking a nearby trail with a group of friends or hosting a potluck picnic. Look for free events in your area and keep an eye out for occasional deals. You may be surprised by how much fun you can have without spending away your savings.
As for you introverts who wish you made more money, you might earn more income if you venture outside your comfort zone. Research published earlier this year suggests that one reason why introverts tend to make less money than extroverts is that they often forgo higher paying management positions. But if you know that choosing a job that requires more social contact would eat into your happiness at work, don’t bother. Even if you make less overall, at least you’re able to live more comfortably within your means.