How Introverts and Extroverts Spend Their Money Differently

How you decide to spend your money is a deeply personal issue. It depends on your overall financial state, of course, but also on your upbringing, tastes, and personality — including, it appears, whether you’re an introvert or an extrovert.

While there’s some debate about just how meaningful terms like introvert and extrovert really are (a lot of people don’t exhibit strong tendencies either way), there is general agreement that these two personality types exist.

In broad strokes, those who are more sociable, talkative, and draw energy from being around other people are considered extroverts. Those who are more inward-focused, quiet, and value alone time are considered introverts.

And it turns out these personality traits correlate pretty strongly with how you spend your money.

Extroverts Tend to Spend More and Save Less 

A recent large-scale analysis showed that extroverts have lower savings rates than introverts. This effect held not only in the United States, but around the world.

A big reason for the savings rate difference is that extroverts tend to have stronger cravings for instant gratification. “Extroverts are far more sensitive to rewards, which makes it harder for them to overcome their desire for immediate gratification,” said University of Toronto professor Jacob Hirsh, the author of the study. Basically, they’re willing to spend on items or experiences that bring them a quick dopamine hit. Hirsh wrote that “when making financial decisions, this can contribute to impulsive spending, higher credit card debts, and reduced savings.”

This form of spending behavior shows that extroverts have a tendency to discount the future to a high degree, meaning they place a lower value on money they don’t get right away.

Introverts, on the other hand, discount the future less and exhibit less impulsive spending behavior. They tend to be more methodical and thoughtful about how they spend money.

Recent research has also shown that lower-income extroverts spend a greater proportion of their income on status goods, such as designer clothes, than their introvert counterparts. This act of keeping up with the Joneses, coupled with the fact that extroverts tend to evaluate product advertisements more positively than introverts, could easily be contributing to their lower overall savings rates.

So, should all extroverts be emulating their introverted peers, who tend to save more and be less impulsive? Not so fast.

Aligning Spending and Personality 

Extroverts aren’t doomed to lives of misery because they save less money. Quite the contrary, in fact, as as extroverts are generally happier than introverts and land better jobs. And it’s been shown that introverts who make a concerted effort to act extroverted every once in a while actually experience a boost in happiness. So, this whole story is complex.

Take Camilo Maldonado, co-founder of The Finance Twins (and self-proclaimed “100% extrovert”), as an example of a different perspective. He told me that he thinks his extroversion actually leads him to make better financial decisions.

In Maldonado’s opinion, his outgoing personality reduces temptation in an area that snares many a would-be mindful spender: online shopping.

“Being extroverted is actually a huge asset for me. I am less tempted to shop online because I prefer going in person,” he said. When you couple that tendency with a schedule packed with work, family, and social events, he has created a system where he simply doesn’t have as many opportunities to spend money shopping. As for his introverted friends? In Maldonado’s experience, they get into trouble because they’re more inclined to shop online, where it’s so easy to buy things they don’t need. 

One key thing to keep in mind, whether you’re an introvert or extrovert, is that we’re happier when our spending is in line with our personalities. If you enjoy experiences, spend on experiences. If you enjoy things, spend on things. If it brings you joy to give people gifts, honor those feelings.

Regardless of what a study says, we all have the power of autonomy and choice. Ultimately, it doesn’t matter if you tend toward extroversion or introversion. What matters is that you consciously choose to spend your money in a way that brings you genuine happiness and sets you up for a stable future.

Tips for Spending Mindfully

If you’re having a hard time reaching your financial goals in part because your personality lends itself to impulsiveness, there are things you can do to work around your urge to splurge.

For starters, make a list before you go to any store, and stick to it. If creating a zero-sum budget is too overwhelming, there are simpler, gentler alternatives that can still help you keep better tabs on your spending, as well as budgeting apps that make the process easier. And you may want to reevaluate how you’re using your credit cards.

It can also help to make it as hard as possible to make impulse purchases online. Turn off one-click ordering on Amazon, unsubscribe from email marketing lists, and delete shopping apps from your phone so you add some friction to the buying process.

With any purchase, force yourself to pause and really consider whether what you’re buying is a need or a want. Some people like to institute a 30-day waiting period before they execute any purchase over a certain dollar threshold (such as $100), forcing themselves to take any fleeting emotions out of it. If you’re still thinking about the item a month later, chances are it’s worth it — but there’s a good chance you’ll forget all about it by then.

You can also learn the tricks that marketers use to get you to part with your cash, so you’re ready to combat them. A good example is “scarcity marketing,” which is when a company will try to make you feel like you’re missing out on a once-in-a-lifetime opportunity. If you’re aware that the hype in such cases is usually entirely artificial, it could help you to avoid making a regrettable purchase in the heat of the moment.

Extroverts, who recharge in the company of others, may find they’re especially vulnerable to FOMO — the “fear of missing out” when friends are out having fun (and spending money). Here are some strategies to combat that feeling — including limiting social media and distractions.

Finally, monitor your stress levels. We all make worse decisions when we’re under a heavy cognitive load. If you’re an extrovert, you should be especially careful about shopping when you’re tired, hungry, or stressed, as those states can lead to more impulse buying.

Summing Up

“Know thyself” is a phrase carved above the entrance to the Delphi, a famous Greek sanctuary from antiquity. Although the words are thousands of years old, their simple wisdom is still applicable today. Only if you know your personality and your preferences can you design a spending system that makes you optimally happy and financially secure.

If you’re curious about whether you’re more introverted or extroverted, so you can better understand the spending choices you make, you can take this simple test to find out.

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Drew Housman


Drew is a former professional basketball player and a Harvard graduate. He is passionate about writing content that empowers people to improve their careers, save more money, and achieve financial independence. His writing has been featured on MarketWatch, Business Insider, and ESPN.