What your spending habits say about who you are, study says

Decisions on how you spend your money can signal key traits about your personality, according to a new study. People who tend to be neurotic typically spend less on mortgage payments than others, for instance.

On the theory that consumers use money to express themselves as individuals, researchers at University College London and Columbia University analyzed spending by more than 2,000 consumers in the U.K. who agreed to provide their financial data for analysis. Overall, the researchers analyzed more than 2 million spending records, including purchases made at Amazon and British supermarkets like Tesco. The paper was recently published in Psychological Science, a journal of the Association for Psychological Science.

Participants in the study also completed a survey related to the “Big Five” personality traits: openness to experience, conscientiousness, extraversion, agreeableness and neuroticism. Then, the researchers used a machine-learning technique to examine how the consumers’ spending matched with those traits.

The result: Not all the traits correlated directly with people’s spending, but researchers found that there were stronger matches with narrow traits like materialism and self-control.

“Our findings demonstrate for the first time that it is possible to predict people’s personality from their spending,” said Joe Gladstone, assistant professor at University College London, who co-led the research, in a statement.

While it may seem like an intriguing method for getting a glimpse into your personality, there are serious ethical questions accompanying the research, the co-authors noted. Companies could analyze spending patterns to identify vulnerable consumers, like people who lack self-control, and then try to sell them products that could ultimately be harmful.

“There is an urgent need for policymakers to ensure that individuals (and societies) are protected against potential abuse of such technologies,” the co-authors wrote.

The benefits of being neurotic

Some of the finding might not be all that surprising. For instance:

• Consumers more open to experience tended to spend more on flights.
• People who were more extroverted tended to make more dining and drinking purchases.
• Consumers who were more agreeable donated more to charity.
• Conscientious consumers socked away more in savings.
• More materialistic consumers spent more on jewelry and less on donations.

Additionally, people categorized as neurotic — or those who have higher anxiety and worries — tend to have lower mortgage payments, possibly because they’re more likely to worry about overextending themselves financially. And people who reported greater self-control spent less on bank fees, they found.

“It didn’t matter whether a person was old or young, or whether they had a high or low salary — our predictions were broadly consistent,” said co-author Sandra Matz of Columbia Business School.

One exception is that people who live in poor areas were more difficult to predict, perhaps because they have fewer choices for spending their money in ways that express their personalities, she added.