Mind & Body

Your Spending May Reveal Your Personality Traits

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You might not want Google or Facebook or Apple to know where you are, who you're talking to, and what you're spending your money on. But there are two sides to the big data coin: Those same things can also teach us important things about ourselves. According to recent research published in the journal Psychological Science, scientists can suss out certain personality traits from the way people spend their money. In the future, they just might be able to gauge your level of materialism or self-control based on how often you purchase $5 lattes.

You Are What You Buy

Scientists have long known that data taken from Facebook and Twitter profiles, Flickr photos, and music purchases could help them infer a person's personality traits. But for this study, Dr. Joe J. Gladstone from University College London wanted to find out if the same was true for data on purchasing trends. He and his co-authors from Columbia University hypothesized that they could use spending records from some of the 20 billion payment cards in circulation to accurately predict peoples' psychological profiles.

With the consent of more than 2,000 British consumers who used a money-tracking app on their phones, Gladstone and his research partners gathered 12 months of spending information. They also asked the participants to complete a personality survey. The researchers grouped spending into a whopping 279 categories, including payments made at supermarkets, at furniture stores, for insurance policies, and, yes, at coffee shops. To make sure the wealthiest participants didn't skew the numbers, the researchers used relative spending instead of raw amounts — for example, two people might spend different amounts on groceries each month, but it could still comprise the same percentage of their overall spending.

With that done, the researchers got to work categorizing, analyzing, and predicting. A machine-learning technique helped them analyze whether the participants' spending was predictive of specific personality traits.

An OCEAN of Spending Habits

To assess the participants' personalities, the researchers used the Big Five model, a widely accepted model of personality that groups personality traits into five common categories. You can take the Big Five personality questionnaire yourself right here, but here's the breakdown Gladstone and his co-authors used in their research:

  • Openness: open to new experiences and complex vs. conventional and uncreative
  • Conscientiousness: dependable and self-disciplined vs. disorganized and careless
  • Extroversion: extroverted and enthusiastic vs. reserved and quiet
  • Agreeableness: sympathetic and warm vs. critical and quarrelsome
  • Neuroticism: anxious and easily upset vs. calm and emotionally stable

In addition to questions about the Big Five traits, the researchers designed their survey to measure materialism and self-control. They defined materialism as the importance a person places on material possessions and physical comfort and measured it using phrases like "I admire people who own expensive homes, cars, and clothes" and "I like a lot of luxury in my life." The researchers defined self-control as how well a person can control and regulate their impulses, and measured it using a single phrase: "I am good at resisting temptation."

In the end, their model based on purchasing trends wasn't as good at predicting personality traits as past models that used Facebook likes and status updates, but it was comparable with those that used music preferences and Flickr photos. The accuracy of the new model's predictions varied across personality traits, but they were least accurate for the general traits in the Big Five and most accurate when it came to the specific traits of materialism and self-control.

Still, according to the results, people who were more extroverted seemed to spend more on dining and drinking, while people who were more open to experience spent more on flights and trips. Folks who were more agreeable donated to charity, and those who were high in conscientiousness were likely to save their money. Those with higher levels of neuroticism spent less on mortgage payments.

As for the more specific traits that the researchers analyzed, those who were higher in materialism spent more money on jewelry, while those with high self-control spent less on banking charges.

The findings were consistent across age and socioeconomic status. "The one exception is that people who lived in highly deprived areas were more difficult to predict," researcher Sandra Matz said in a press release. "One possible explanation may be that deprived areas offer fewer opportunities to spend money in a way that reflects psychological preferences."

The Future Is Uncertain

Gladstone and the co-authors of this study admit that big data can be scary. What if a financial company could determine from your spending that you had low self-control, and then target you with ads and offers for high-risk loans? To keep this from happening, the researchers urged policymakers to find ways to protect people from the abuse of this kind of technology.

For now, though, try taking a look at your own bank statements and spending apps. What do you think they say about you?

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Want to change your spending habits? Check out the New York Times and Wall Street Journal bestseller "I Will Teach You to Be Rich" by Ramit Sethi. The audiobook is free with an Audible trial. We handpick reading recommendations we think you may like. If you choose to make a purchase, Curiosity will get a share of the sale.

Written by Kelsey Donk August 15, 2019

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