Introverts and Extroverts Spend Money Differently, According to a New Study

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We already know that introverts and extroverts approach the world differently. Compared to extroverts, introverts spend more time alone and get more drained by socializing. They prefer calm, low-key environments, whereas extroverts thrive in more exciting, fast-paced ones. In general, introverts need time to think before they speak and act, while extroverts are more prone to “thinking on their feet” and diving into new experiences quickly. As I explain in my book, The Secret Lives of Introverts, experts believe these variations are due to a biological difference in the way introverts and extroverts process rewards.

Now we  know that introverts and extroverts also spend money differently.

In a recent study published in Psychological Science, researchers found that poor extroverts spent more money on luxury goods than poor introverts. The study used real life spending data from UK bank accounts, combined with personality assessments.

“We’ve shown that personality looks to be an important factor in how people respond to living with limited resources,” explained Dr. Joe Gladstone, study co-author from UCL School of Management.

The study analyzed thousands of transactions from 718 customers at a multinational bank over one year. The results took into account other factors that might influence spending habits, such as employment status, age, and sex. Researchers also looked at cash transactions.

The researchers sorted each person’s spending into categories, from very low status to very high status. High-status categories included things like golf, electronics, art, and foreign air travel. Low-status categories included things like discount stores, pawnbrokers, and salvage yards.

The results? Poor people spent differently depending on their level of extroversion. Those who rated high in extroversion spent more money on high-status items, compared with low-income people who were less extroverted.

“These people had the same financial resources and/or budget available to them, but our data show that they spent this money in very different ways,” noted Blaine Landis, study co-author from University College London.

Interestingly, the researchers found that personality-related differences in spending diminished as a person’s income increased. In other words, higher-income extroverts spent about the same amount on luxury goods as higher-income introverts.

“One way to interpret the gap narrowing among people with higher incomes is that they do not feel this sense of relative deprivation that [other] people do, and therefore we don’t see these personality differences emerging,” Landis told Introvert, Dear.

Why Introverts and Extroverts Spend Differently

Why might low-income extroverts spend more than low-income introverts on luxury goods?

Past research found that people who are sociable and outgoing (traits that are associated with extroversion) care more about their social status than others. Also, people who have less money tend to feel like they are of lower status in society. So, they may spend a higher percentage of their income on goods and services that are perceived to have a high status.

“Our findings suggest that extroverts compensate for having low income by spending more on items and experiences that reflect higher status,” explained Landis.

Of course, many introverts (regardless of their income) will tell you that they enjoy electronics, art, travel, and other “luxury” items, too. It isn’t that introverts don’t care about these things at all. Instead, it seems that some introverts just don’t feel as strong a need to spend money on things that will increase their social standing, compared to extroverts.

And there’s good news for introverts. Their tendency to spend less on luxury items when poor may help them financially, Landis told Introvert, Dear. It may put them in a better position to improve their financial lot in life.

Score one for Team Introvert.

We Don’t Have the Full Picture Yet

Landis and Gladstone caution that further research is needed. Because the study took place in the UK, we don’t know yet whether the results are representative of the population as a whole.

Also, the study is correlational, not causal. This means we don’t know which factors are causing the results. It could be that being poor causes some people to care more about their social status. Or, it could be that some variable other than extroversion makes people more responsive to their social status. We don’t have the full picture yet.

Nevertheless, the results are significant. Past research treated the experience of low income and relative deprivation as a condition that affected everyone — both introvert and extrovert — equally. “We hope this new association will help us better understand which people may be likely to engage in behavior that perpetuates the conditions of financial hardship,” explained Gladstone.

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Read this: The Reason Socializing Drains Introverts More Than Extroverts  retina_favicon1

Image credit: @unforbiddenyet via Twenty20

  • Ron W

    Seems kinda obvious to me, regardless or rich or poor, extroverts will spend more money on “look at me” things than introverts that generally don’t want to stand out.

    • But that wasn’t what the study found to be true.

      “Interestingly, the researchers found that personality-related differences in spending diminished as a person’s income increased. In other words, higher-income extroverts spent about the same amount on luxury goods as higher-income introverts.”

      Extroverts and introverts with higher incomes tended to spend the same amount on luxury items. So far, the distinction seems to point to the lower incomes being a primary factor in how introverts express themselves financially, not the introversion by itself.

  • Rupali G

    Great article. One interesting thing to look would be how some introverts feel pressured by other extroverts to spend money. Whenever I wanted to save money, I was told “You should go out more to nightclubs and bars”, “Go and buy some more sexy clothes”, or “You should decorate your place and buy more furniture.” All of that costs money. That stuff doesn’t interest some introverts either. 🙂

  • njguy54

    The older I get, the less compelled I feel to buy the hottest new gadget. For one thing, I’m overwhelmed with stuff as it is. Secondly, what I have works. I spend far more time shipping stuff off to Goodwill or giving things to folks who really need them than buying new. My phone and computer get the job done, and I hope to have them in service for many more years. My car gets me from A to B. And none of it is for show.

  • Chad Baldwin

    I’m curious that if low-income introverts don’t spend their money more frequently on luxury items, do they eventually spend it all on one big item? For example, would an low-income introvert save bunch of money for a car rather than take out a loan? What do they spend the savings on?

    I doubt they’re just hording it. Having money and not using it is kind of pointless. So, what are the big purchases does a low-income introvert make? Are they investing?

    That’s my biggest question about this.

  • Kitti

    isn’t there some correlation between extroversion and dopamine that makes extroverts more likely to seek out “rewards” or whatever? maybe spending money on more “shiny” things feeds the dopamine in an extrovert’s mind or something.

    that being said, my highly introverted brother got really upset about my highly extroverted husband spending around $25 on gifts for me one weekend at the flea market because he thought our household couldn’t afford to “blow money” everywhere (after my husband had already paid his share of the bills). same introverted brother dropped $160 on a light saber for himself two months later. 😉

    • Kitti

      actually after we all got together to have a discussion we concluded that they each were spending the same amount on “extra” goodies, they just tended to time them differently. my husband spends money on lots of little inexpensive things throughout the month, and my brother is more prone to saving for a while then spending the same amount on a single item once a month or so.

  • GabrielaCasineanu

    Interesting information. I once asked in a Facebook group for introverts how many don’t like when a sales person approaches them in a store. Over 130 answered within one hour mentioning they don’t like that sales approach, and prefer to be left alone. I wonder how much of the survey results are affected by this behaviour.