Hello best life seekers!
Did you know that nice people may be at greater risk of bankruptcy and other financial hardships compared with their less agreeable peers? Even agreeableness measured in childhood predicted financial hardship later in life. A recent joint study by professors at Columbia Business School and University College London found that these financial difficulties are not because nice people are more cooperative but because that they don’t value money as much.
So does that mean you’re too nice to be rich or if you have money, you’re kind of a mean person?
Well, we can’t say for sure but having a nice, warm personality is related to negative financial outcomes like lower credit scores, income, and savings and higher debt and default rates. Researchers found that “agreeable people simply care less about money and therefore are at higher risk of money mismanagement.” The financial health of lower income individuals is more at risk since they lack the monetary means to “compensate for the detrimental impact of their agreeable personalities.” In fact, in one part of the study, the city that scored significantly higher on agreeableness also had a 50% higher bankruptcy rate compared with its peers!
The takeaway from this, best life seekers, isn’t that you should be a grinch or raise your children to be a-holes.
Instead, this study highlights the downside of good personality traits so that we can be on guard and mitigate. If you’re a nice person – and I hope you are! – then being aware of this could prove helpful to your finances. You don’t have to love money or be mean, just take responsibility for your financial health by realizing that it’s a priority for your life whether you like it or not. Budgeting requires only a 4th grade knowledge of math. Most aspects of retirement or investment management require basic reading comprehension skills and basic junior high math. Automated plans and contributions are easy to set up and maintain – sort of leave it and forget it.
Financial hardship can have serious implications for people’s well-being. Being a nice person shouldn’t mean you have to finish last. Personal finance 101 is part of being an adult. It’s sort of like brushing your teeth – you may not enjoy it but it’s necessary. It’s also not rocket science or calculus – don’t let the economic pros fool you – so don’t be scared.
Financial stability doesn’t mean you have to be a Scrooge or go around keying someone’s car. Keep being nice and agreeable, just have a budget and stick with it. Automate your bills and savings contributions to make it simple and hassle-free. Need pointers? Here’s an easy place to start: The #1 Financial Rule to Follow.
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