Money can buy you happiness, but only if you spend on things that fit your personality, according to a new study that examined more than 70,000 bank spending transactions in the UK.
The study showed that people who spent more money on purchases that aligned with their personality traits reported greater life satisfaction.
The study, conducted by Cambridge Judge Business School and Cambridge University in collaboration with a bank in UK, was based on 76,863 transactions of 625 participants.
Researchers whittled down 112 spending categories grouped by the bank into 59 categories that had at least 500 transactions over a six-month period.
The study matched spending categories on the widely recognised “Big Five” personality traits - openness to experience (artistic versus traditional), conscientiousness (self-controlled vs easygoing), extraversion (outgoing vs reserved), agreeableness (compassionate vs competitive), and neuroticism (prone to stress vs stable).
For example, “eating out in pubs” was rated as an extroverted and low conscientiousness (impulsive) spending category, whereas “charities” and “pets” were rated as agreeable spending categories.
The researchers then compared the participants’ actual purchases to their personalities and found that people spent more money on products that match their personality.
A highly extroverted person spent approximately 52 pounds more each year on “pub nights” than an introverted person.
Similarly, a highly conscientiousness person spent 124 pounds more annually on “health and fitness” than a person low in conscientiousness.
The data showed that those who bought products which more closely matched their personalities reported higher satisfaction with their lives, and this effect was stronger than the amount of satisfaction brought by their total income or total spending.
“Historically, studies had found a weak relationship between money and overall well-being,” said Joe Gladstone, a Research Associate at Cambridge Judge Business School.
“Our study breaks new ground by mining actual bank-transaction data and demonstrating that spending can increase our happiness when it is spent on goods and services that fit our personalities and so meet our psychological needs,” Gladstone said.
The researchers also backed up their findings by running a second experiment, where they gave people a voucher to spend in either a bookshop or at a bar.
Extroverts who spent at a bar were happier than introverts forced to spend at a bar, while introverts spending at a bookshop were happier than extroverts spending at a bookshop.
This follow-up experiment overcomes the limitations of correlational data by demonstrating that spending money on things that match a person’s personality can cause an increase in happiness, researchers said. The study was published in the journal Psychological Science.