Openness to Change in Personal Finance

Last updated on November 21st, 2023 at 12:19 pm

You’ve probably spent time thinking about how you might improve your health, career, finances, family, spirituality, or another essential element of your life. During this contemplation, you may inevitably conclude that a change is required. Many readers of our blog and books share a common problem: they acknowledge a change is necessary (either for themselves or their client), but they also instinctively know that making the needed change will be tough. Why?

First, Let’s Be Open to Change

One of the hurdles to making any significant change is being open or receptive to something new. We often refer to this as openness to change, which relates to many different personal characteristics. First, it’s related to the personality characteristic from the Big Five, known as “Openness to Experience.” In a nutshell, this personality characteristic is associated with those of us who enjoy new sights, sounds, and experiences. It is related to creativity and having a desire to learn different ways of approaching a problem or chore at home. It also relates to our values: do we value what’s new and different or what’s tried and true? Think about how you might feel about being an early adopter of technology and how you would value experiencing something new and unique.

Openness to change is also related to our past experiences and behaviors. Even if we are naturally more open to change but grew up in an environment that rigidly adheres to tradition and routine while avoiding disruption, we might be less inclined to be open. In other words, our experiences can set limits on our natural personality.

Downside of Openness

While Openness to Experience is often thought of as positive, there are downsides to any characteristic we possess (see two of those weaknesses in the investing world here). An individual high on openness may have a hard time sticking to necessary routines; he or she may be less than predictable to friends and loved ones, and he or she might also have difficulty choosing a path and staying on it. Suppose you’ve ever worked for a boss that is high on Openness to Experience. In that case, it can be a frustrating situation: you might get a request at 5:00 pm for a report due the following day, work all night, and turn it in by 9:00 am sharp . . . only to learn that your boss has decided (overnight!) to abandon the idea and move on to something else.

Let’s put the idea in a financial psychology context: imagine you and your spouse agree that a budget is a great (and necessary) idea. You both work together to create it, identify goals that sticking to the budget will allow you to reach, shake hands, and go on about your week or month. If one of the spouses is more open to change, open to experience, that spouse might be more inclined to veer away from the budget because he or she sees exciting exceptions or new ways of shopping or new ways of budgeting along the way. Yes, that openness helped create the budget in the first place (being open to having a budget and reaching goals). Still, the same personality characteristic can also lead someone to be “creative” about money.

Making The Change Stick

The upshot here: being open to making a financial change is important, but so, too is having the ability to make that change last. It’s great that you want to try some new method of sticking to a spending plan, but can you implement that change long enough to see an outcome? And long enough that it will become a habit? That’s the tough road that many of us who are open to experience face: we want to make the change because we love change. But then, we might get tired of our new path and head towards something else before the new (now old) plan could be effective. Knowing these characteristics and predispositions before we begin can prepare us for the inevitable future situation when we are inclined to wander off our plan.

An openness to change will likely only be fruitful if you can take steps to ensure that positive change will be lasting. If you’re curious about your own readiness for financial changes, you can take our readiness for change assessment here and get a report that helps you understand both your openness to making a change as well as your ability to make that change stick.


References & Resources

Cheng, M. (2018, October 4). How Openness Personality Affects Financial Planning And Investment Decision Making. Forbes Online. Retrieved April 17, 2019.

Duckworth, A., & Weir, D. (2011). Personality and response to the financial crisis. Michigan Retirement Research Center Research Paper No. WP260.

McCrae, R. R. (1987). Creativity, divergent thinking, and openness to experience. Journal of personality and social psychology52(6), 1258.

McCrae, R. R., & Costa, P. T. (1987). Validation of the five-factor model of personality across instruments and observers. Journal of personality and social psychology52(1), 81.


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