Personality Traits and Financial Satisfaction: Investigation of a Hierarchical Approach

By Davis, Kimberlee; Runyan, Rodney C. | Journal of Financial Counseling and Planning, January 1, 2016 | Go to article overview

Personality Traits and Financial Satisfaction: Investigation of a Hierarchical Approach


Davis, Kimberlee, Runyan, Rodney C., Journal of Financial Counseling and Planning


Are personality traits associated with financial satisfaction? This exploratory study sought to provide a framework for understanding personality determinants of financial satisfaction. Financial satisfaction and its impact on consumers suggest the utility of such a framework. Consumer financial capability conceptualized as perceived financial capability, financial literacy, and desirable financial behaviors contribute positively to financial satisfaction (Xiao, Chen, & Chen, 2014). Robb and Woodyard (2011) found that both objective and subjective financial knowledge have an influence on financial behaviors and that, in turn, financial satisfaction is associated with financial behaviors. According to van Praag (2004), financial satisfaction is a gauge of overall well-being. Diener and Biswas-Diener (2002) conclude, based on a review of the extant literature, that financial satisfaction and individualincome levels are related and may be predictors of wellbeing. Research has also shown that financial satisfaction increases with age and can be partly explained by decreasing liabilities and increasing assets (Plagnol, 2011). Financial satisfaction has implications for quality of life (Michalos, 2008) and life satisfaction (Bowling & Windsor, 2001; Muske & Winter, 2004; Xiao, Tang, & Shim, 2009). On a global level, Ng and Diener (2014) found that across nations of varying affluence levels, financial satisfaction strongly predicted satisfaction with life in general. In addition, it is thought that financial satisfaction has an impact on marital stress (Freeman, Carlson, & Sperry, 1993), work productivity (Garman, Leech, & Grable, 1996; Williams, Haldeman, & Cramer, 1996) and marital satisfaction (Godwin, 1994). Van Praag, Romanov, and Ferrer-i-Carbonell (2010) concluded that the influence of religiosity on financial satisfaction for Jews is related to having children and that the effect of having children differs with the degree of religiosity. For the Arab population, this relationship was not found.

Few studies have examined whether personality traits are related to personal finances. McKenna, Hyllegard, and Linder (2003) suggest the use of the Myers-Briggs Type Indicator and the associated Keirsey's instrument to address money management styles. However, no studies were found which specifically looked at personality traits and their relationships to financial satisfaction. The purpose of this study was to examine whether Mowen's (2000) Metatheoretic Model of Motivation and Personality (3M Model) can be used as a theoretical framework to develop a hierarchical structure of traits associated with financial satisfaction. The 3M Model seeks to account for how personality traits interact with situation to influence attitudes and behaviors. It was anticipated that the explanatory power of the 3M Model would be reflected in the extent to which the model fit the data. This type of exploration may help explain if personality traits, financial behaviors, and financial situation are related to financial satisfaction, thereby providing insights for educators, counselors, and planners.

Conceptual Framework and Research Questions

Metatheoretic Model of Motivation and Personality

According to Mowen (2000), traits are "unidimensional underlying predispositions of individuals that arise from genetics and early learning history and represent the broadest reference for performing programs or behaviors" (p. 21). The 3M Model integrates control theory, evolutionary psychology, and a hierarchical approach to personality to investigate motivation, personality, and behavior (Mowen, 2000). The model proposes a four-level hierarchy of traits: elemental traits, compound traits, situational traits, and surface traits. Development of elemental traits results from genetics and individual early learning. The elemental traits include the "Big Five" personality traits, arranged as follows in order of magnitude of variance accounted for in personality ratings. …

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