Being too nice could cost you money over time

A new study shows a link between agreeableness and financial troubles

Kelly Dilworth
Personal finance writer
Specializing in new trends in credit

Being too nice could cost you money over time

Being nice may score you points with friends and family, but research suggests a kind and giving personality could also spell trouble for your finances. 

According to an October 2018 study published by the Journal of Personality and Social Psychology, people who score highly for agreeableness – a personality trait that’s defined by warmth, cooperation and friendliness – are at higher risk for bankruptcy and other financial problems. 

In addition, nice people tend to have lower credit scores, on average. They also tend to make less money, save less and charge more to their cards. 

“We found that agreeableness was associated with indicators of financial hardship, including lower savings, higher debt and higher default rates,” said study co-author Joe Gladstone in a news release

The study builds upon previous research that’s found people with agreeable personalities often struggle more financially than their meaner, more selfish peers. For example, a 2012 study published in the Journal of Applied Psychology concluded that people with kind and easygoing personalities tended to have worse credit. Meanwhile, an April 2018 paper found that agreeable people also earn less overall.  

Nice people don't necessarily struggle because they're being taken advantage of or are too cooperative. Instead, researchers have found nice people tend to value money less than people who are more disagreeable by nature – and thus may be more likely to mismanage it. People who value relationships or other factors over money may also be more likely to make less-than-optimal decisions. 

See related: Should you use a credit card as your emergency fund? 

Nice people don’t pay close enough attention to their money

Researchers also think that easygoing people pay too little attention to their finances and so tend to lose out on savings or pay too much for products. They may also be more likely to forget bill payments or skip shopping around for the best deals. 

“We reason that placing a low value on money means less cognitive attention and resources will be allocated to keeping track of personal finances,” write researchers in the October 2018 report. 

For example, people who are more easygoing may be less likely to track their spending or fight for bigger savings. They may also be more likely to sign up for loans without closely reading the terms, give away their money more freely or accept a job offer without fighting for a higher wage. 

That can have a big impact over time, especially since smart money management often requires closely monitoring your finances, being assertive with others – including lenders and salespeople – and going after the best deals. If you take a more passive approach with your finances, you could find your money slowly trickling away – or worse, lose a big chunk of it to a bad decision. 

In addition, as I’ve found in recent years, being too generous with your money can quickly deplete your savings. 

Consider, for example, how much money you could lose just by mindlessly picking a credit card with a higher interest rate. If you picked the first card offered to you by a personal banker, for example, you could potentially wind up paying hundreds of dollars more in interest if the card’s APR is just a few points higher than what you’d find online. 

Similarly, if you don’t place a high value on money – and thus don’t bother to search for sales on what you want to buy – you could wind up paying significantly more for everything from food to airplane tickets to clothing and more. 

See related: What do to when your balance transfer is denied 

Personality isn’t destiny

You don’t necessarily need to be a miser, though, to get ahead financially. You just need to be a little more mindful and assertive with your cash. 

The October 2018 study found that personality tended to have a less potent effect on people’s trajectories if they had more money overall. Agreeable people on tight budgets, by contrast, tended to be more vulnerable to financial disaster – in part because they didn’t have enough money available to make up for costly mistakes. 

“Being kind and trusting has financial costs, especially for those who do not have the means to compensate for their personalities,” said study co-author Gladstone in the news release.

The upshot for people on a budget: You may not always have enough cash to clean up after bad decisions, but you do have the ability to shift your habits and be more mindful with your actions. 

If you have an easygoing personality and pay less attention to money than your Type A peers, take some time to do a quick inventory of your finances and see whether you’ve been too laissez-faire with your financial affairs. 

You may find that paying more attention to your finances – and being more assertive with your cash – could make a big difference to your bottom line. 


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Updated: 11-15-2018