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The Money Mindset: How Personality Shapes Your Financial Well-Being

| Maarit Lassander

Imagine walking into your bank for a scheduled appointment with your financial advisor. As you settle into a cozy armchair, you're handed a tablet with a questionnaire. After tapping through the questions, you receive a summary that outlines your personality across five different traits. This report not only offers insights into your unique characteristics but also provides tips on how to cultivate skills that support your future financial well-being.


You might be reminded that, since conscientiousness isn't your strongest suit, you tend to sign papers without reading them thoroughly. Or, you may realize that your difficulty in trusting the economy's trajectory leads you to avoid taking out loans, even if they could help you achieve a long-held dream. By recognizing your own behavioral patterns, you gain the power to evaluate their impact on your life.

The Emotional and Personality Equation

Our emotional experiences and personality traits play a significant role in determining whether we live within our means and feel financially secure. While financial well-being is often defined in terms of objective income levels, it's also about our subjective sense of security, control, and sufficiency.

Two personality traits, in particular, stand out as key players in financial management: conscientiousness and neuroticism. Conscientiousness encompasses qualities like orderliness, planning, reliability, and responsibility – the opposite of which is carelessness. Neuroticism, on the other hand, refers to a relatively higher tendency to experience unpleasant emotions such as anxiety, loneliness, worry, guilt, and fear. These emotional experiences undoubtedly have far-reaching effects on our lives, including our financial management. When worries and anxiety drain our energy, they influence our willingness to seize opportunities, plan for the future, and trust in our own abilities. To take action, we must believe that our efforts matter – a belief that neuroticism can undermine. Its opposite is emotional stability.

The Personality-Finance Connection

Research conducted among young adults suggests that conscientiousness predicts better financial well-being, while neuroticism is linked to financial hardship. These findings, which have been echoed in other studies, may not come as a surprise, but their implications are crucial to recognize. Importantly, both conscientiousness and neuroticism have been shown to be malleable traits. Sometimes, life experiences shape them; other times, we can influence them intentionally.

Investing in Mental Health, Investing in Financial Futures

The study of personality and financial well-being is particularly relevant today, as it sheds light on how promoting mental health in children and young people can be an investment in their financial futures. A sense of security in childhood fosters development and the ability to explore the world with confidence in one's abilities, opportunities, and support from the environment. The less depression, anxiety, and chronic worry young people experience, the more opportunities they have to acquire skills and knowledge for making positive financial decisions.

Cultivating Conscientiousness

Conscientiousness can be viewed in many ways, but at its best, it's a quality that can be practiced. Positive conscientiousness isn't based on external rules or fear of breaking them, but on intrinsic motivation. A conscientious young person may have the courage to make their own decisions and pursue goals that feel right to them.

Aligning Spending with Personality

Interestingly, research has found that when people spend in accordance with their personality traits, it increases happiness. Extroverted individuals may derive more enjoyment from choosing a night out at a restaurant with friends, while more introverted folks might find joy in a good book and an evening at home. Thus, knowing yourself and making choices that honor your psychological needs can promote emotional balance – and this extends to how we use money.

By understanding the intricate ways in which our emotions and personality shape our financial behaviors, we can take steps to foster a healthier relationship with money. Whether it's through cultivating conscientiousness, managing neuroticism, or aligning our spending with our authentic selves, the path to financial well-being is paved with self-awareness and intentional action. So, the next time you find yourself in that cozy armchair at the bank, embrace the opportunity to gain a deeper understanding of your money mindset – it just might be the key to unlocking a more financially fulfilling future.