Come Diwali and Christmas, how you spend your holidays will not only say a lot about you, but how you spend your money will speak even more, according to a new study.
Researchers from Northwestern University and University College London have concluded that it’s the shy and emotionally stable friends that will spend a lot more, while extroverts are less likely to show love, probably because, “…they spend more money all the time, so the holidays are not so special,” said psychologist Dr Sara Weston at Northwestern University in Chicago.
Then there are those who are nervous, have a low stress-threshold and largely emotionally unstable. “They are cautious when it comes to splurging in the holiday season,” added Dr Weston.
Since holidays are the best time to gauge spending behaviour, it gave researchers an unique opportunity to examine personalities through money and they analyzed more than two million individual transactions from 2,133 participants – who were split among five personality types.
These included ‘openness to experience,’ ‘conscientiousness,’ ‘extraversion,’ ‘agreeableness,’ and ‘neuroticism.’
Results revealed that confident people spend more freely during the holidays, while nervous people spend less.
Emotionally stable people were said to be “untethered by the pressure and fear of disappointing others.”
Low openness and conscientiousness were directly related to higher spending, while neurotic participants often spent less.
In addition, those with more active imaginations, or those higher in openness, spend less during the holidays.
People high in openness are typically low in traditionalism, making them less inclined to splurge on gifts, found the study.
“Individual differences are likely to shape how people react to holiday-related environmental stressors in terms of their subsequent financial behaviors. For instance, the holiday season is often a time of increased stress, and psychological stress reduces self-control which may lead to excessive spending,” said Dr Weston.
But, “…there’s no strong reason to make spending the outcome as opposed to personality,” Dr Weston said.
“It could be that if you spend more at the holidays, that makes you calmer, or that people spent more in order to be spending more time with family, and that is making them less anxious,” she said.
Diwali or Christmas or any other holiday season, for instance Durga Puja in the east of India or Onam and Pongal in the south is when retailers claim to make 40% of their annual revenue, so knowing the psychology behind what makes people spend could also help boost sales and experts hope their study will be of use to retailers and individuals looking to understand and control spending habits.
Although researchers emphasize that personality traits are just one aspect of consumer behaviour, there are still many others that will influence spending such as household size to income and it may be difficult to know how these connect with one another.
But the bottom line is: just because you like to shower your loved ones with gifts this Diwali, it will not automatically mean that you are more emotionally stable than others and if you are someone who has tighter budget, you are not a Scrooge. “Take these findings with a grain of salt,” said Dr Weston. “And don’t let consumerism dictate the way you live your life,” she adds.
