Kind and trusting people are more likely to end up bankrupt

Being nice and kind to others has many benefits, but money management may not be among them, a new study in the Journal of Personality and Social Psychology finds. Looking at geographic data, bank account information and other data from more than three million participants, researchers Sandra C. Matz and Joe J. Gladstone found that kinder individuals are at greater risk of experiencing financial hardships.

“Previous research suggested that agreeableness was associated with lower credit scores and income. We wanted to see if that association held true for other financial indicators and, if so, better understand why nice guys seem to finish last,” Matz said. “We found that agreeableness was associated with indicators of financial hardship, including lower savings, higher debt and higher default rates.”

When you’re agreeable, you’re less likely to care about money

Analyzing publicly available personality data and financial information from two regions in the United Kingdom at similar income levels, the researchers found that the area with more agreeable people had a 50% higher bankruptcy rate. Why are nice people more likely to get into these risky financial situations? The research finds that this can be explained in part by agreeable people’s attitude towards money. When you do not care about money, you do not care about your financial health.

Looking at nationally representative survey responses, digital data collected from customer bank accounts, online panels, and government-recorded insolvency rates across the United States and United Kingdom, the researchers found that agreeable people were not worse negotiators than others —but they did assign a lower subjective value to money. When you care less about money in general, the threat of losing it does not motivate you as much.

Not every agreeable, pleasant person you meet is at risk of bankruptcy, however. The researchers found that lower-income individuals with nice, trusting personalities were the most likely to experience financial hardship, likely because they lacked the money cushion to make up for their agreeable disposition.

“Being kind and trusting has financial costs, especially for those who do not have the financial means to compensate for their personality predispositions and the attitudes to money associated with it,” the study concluded.