What Your Personality Says About Your Financial Decisions

When it comes to making financial decisions, particularly ones involving signing up for a credit card, your personality is a driving factor. “Extroverts brains are wired differently,” says Jacob Hirsh, lead researcher on a just-completed study at Northwestern University's Kellogg School of Management. “They're more sensitive to potential rewards.” Turns out, when your brain is confronted with a choice of “reward now” or “reward later,” two systems kick in. One involves your thinking, analytical brain, which weighs the pros and cons of accepting the offer on the table versus delaying and potentially receiving something of greater value. Psychologists like Hirsh refer to this as the “cool” process. The other system, referred to as the “hot” process, involves a much more primitive part of your brain. In response to the opportunity to receive instant gratification, it releases dopamine.

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