Have you ever made a financial decision and asked yourself - “why did I do that?” Well, personality science might be about to give you a whole new perspective on your spending habits.

Wealth.co.uk uncovered new research which suggests some surprising links between personality type and financial behaviour. Because while being reserved or stubborn might seem like opposite traits, they both correlate strongly with negative spending patterns.

How personality affects financial attitudes

Researchers at the University of Swansea have released a fresh study exploring how personality determines financial attitudes and behaviours. Using the HEXACO personality inventory, they discovered a number of interesting correlations between personality traits and spending habits.

The first finding relates to positive financial practices. People whose personalities are high in extroversion, conscientiousness or honesty are more likely than the average Brit to maintain several good habits, including:

• Monitoring for fraud (73% vs 64%)

• Maintain a credit score (89% vs 81%)

• Make financial plans for the future (87% vs 69%)

They are also more likely to feel financially confident (19% vs 13%), which experts argue leads to greater competence and ultimately better outcomes.

Do stubborn people struggle with money?

A less positive finding from the study is that people who are stubborn or reserved often exhibit several negative traits. They are less likely than the average Brit to budget (31% vs 41%) and more likely to have a ‘life is too short’ mentality around money (33% vs 22%).

As a result, they are less confident and exert less control over their finances. Stubborn or reserved people are therefore also more likely to use a credit card more often than needed (68% vs 35%) and be short on money at the end of the month (82% vs 34%).

What are the best personality traits for financial decision making?

According to previous research, Conscientiousness, Agreeableness, and Openness correlate with the most successful financial behaviours. However, this is all relative to a person’s goals. People who are higher in Extraversion, Neuroticism and Openness tend to be more tolerant of financial risk. But that could be considered either positive or negative - depending on whether you want to pursue a high-risk/high-reward approach or shoot for stability and control.

Personality science offers a fascinating perspective to look at financial behaviour from. Better spending decisions often come not just from understanding finance, but understanding ourselves.

Jonathan Merry, CEO of Wealth.co.uk