Introverts Keep Spending Under Control
Consensus has it that extroverts earn more on average than introverts. However, introverts may have an edge when it comes to spending.
Both contemporary and historical studies going back 100 years indicate that extroverts outearn introverts, on average. According to fascinating research reported by Truity in 2019, extra earnings by extroverts amounted to nearly $10,000 a year. The factors that accounted for extroverts’ income premium, they said, were extroverts’ tendency to express their thoughts and feelings, their energetic work style and their preference for social status and visibility. In other words, their being out there in front, confidently talking a lot brings them a higher income.
But hold on: Higher earnings may not mean much when accompanied by outsized spending. And in the spending department, introverts may have a meaningful edge.
According to the personality research firm NERIS Analytics, documented spending differences between extroverts and introverts include:
Extroverts are more likely than introverts to spend impulsively.
Introverts are more likely than extroverts to put their money into savings.
When asked “Are you frugal?” introverts are more likely to agree.
Introverts have an easier time sticking to a budget.
Extroverts are more likely to view shopping as an enjoyable social excursion, while introverts tend to view shopping as a practical necessity.
According to many financial advisors, introverts are also less motivated by the excitement of risky investments, which keeps them from experiencing cataclysmic losses in bear markets. Other observers point to the savings from introverts having an internal focus and not caring as much as extroverts what others think of them. Introverts are less likely to yearn for the latest luxury items, show-off brands or impress-the-neighbors technology. One study noted that shopping in a group – which introverts would rarely do, given the choice – tended to increase the number of items purchased.
Blogger Michaela Chung put it this way at her Introvert Spring website: “We’re happier ordering pizza for a movie night with our bestie than going out and dropping $30 to see a movie in the theater. Because we’re less likely to go out a lot, we automatically save more money than our extroverted pals who might spend every evening out at pubs or parties. This doesn’t mean we never go out, just that we have more money for social events when we choose to participate in them.”
Now here is my take, a list of expenses that might appear on an extrovert’s credit card statement that a typical introvert would never voluntarily spend money on.
Karaoke bar rental fee for a reunion of 20 old friends
Tanning sessions prior to a public-speaking gig
A painted portrait of themselves to pass down to the next generation
Fancy running gear branded with the logo of a running club
Cover charges for crowded “see and be seen” nightclubs
Multiple streaming services so as to keep up with popular culture
Perhaps that list is a bit over the top, but in truth I can point to many introvert-related spending choices I make that happen to save me money. I don’t buy many clothes, for instance. Not only do I attend vastly fewer social gatherings than the average person, I choose clothes not according to their “look at me!” qualities but in order to be minimally socially acceptable. My taste in cars likewise tends to be utilitarian, although I’d rather drive a vehicle that seems cute to me than one I consider ugly. On HGTV’s house-hunting shows, many couples describe needing expansive outdoor and indoor spaces for entertaining, which also wasn’t a factor when my husband and I looked for a house that would suit us.
It’s not that I think about the Joneses and turn my back on them; it’s more that consumption options intended to compete with, impress or outdo others don’t really register in my mind. And I suspect that by caring less about others’ judgments, many introverts make divergent spending decisions from those of extroverts not only when it comes to major expenses but also with respect to a zillion other daily items. Subtle differences, when multiplied, can add up significantly.
Indeed, a 2016 study of more than 76,000 bank transactions by University of Cambridge psychologists in England revealed telling differences in spending on certain categories of expenses by extroverts and introverts. If you look at the middle column of this research report’s Table 1, you’ll see that extroverts spent more than introverts on travel, toys and hobbies, jewelry, gambling and pub meals, among other matters, while extroverts spent less than introverts on accounting fees, health and life insurance, home insurance, gardening and books. Interesting, eh? I would love to see more research along these lines.