Have you indulged in a little emotional spending recently? Perhaps you’ve taken yourself shopping after a bad day at work? Or maybe you want to buy some revenge outfits after an argument with your other half!
Sound familiar? These retail splurges might be ok every once in a while. But if your emotional shopping is too frequent, it can quickly take a toll on your financial goals.
What is emotional spending?
Emotional spending happens when you buy things (either online or in-person) when your emotions are heightened.
You'll understand this if you've ever felt bored, lonely, sad, or any other intense emotion during a shopping outing.
Each person has their own emotional triggers prompting them to whip out their cash. This article will help you identify yours!
What is an example of emotional spending?
A common emotional spending theme is buying items you can’t afford just because they look good for your image.
There’s a social status attached to these material possessions, but the problem is that newer, trendier, cooler items keep coming out.
There will always be Joneses in our social circle who have something we don’t have. And as jealousy is one of the stronger emotions, it drives us to continue the cycle of emotional spending by chasing the next symbol of wealth.
Essentially, it’s a losing battle!
What’s the difference between emotional spending and compulsive buying?
When emotional shopping occurs in isolated incidents, and you can afford the amount you've spent, it's not always a huge problem.
For example, a one-off shopping trip is understandable if you're going through a bereavement or recent break-up. And if it doesn't empty your bank account, it's unlikely to do harm.
But the problem magnifies when emotional spending becomes a crutch. Do you find that you reach for your credit card every time a coworker rubs you the wrong way? Or perhaps each time you disagree with your mom?
In these situations, emotional spending can quickly get out of hand. You might tell yourself you "deserve" to splurge. But the truth is that you deserve to keep your finances under control.
What are some common reasons for emotional spending?
Everyone has their own emotional spending triggers. Do you recognize any of these?
You are grieving
If you've experienced a bereavement, it's only natural to look for ways to detract from your grief. Shopping can put you back in control following a situation where you may have felt powerless.
Although grief shopping is entirely understandable, exercising good judgment and staying on top of your finances during this difficult time is essential.
You feel sad
You may use shopping as a pick-me-up when you're feeling low. That's because buying something new can give you an instant dopamine hit, the "feel-good" hormone.
A little retail therapy might make you feel better in the short term, but it's often followed by buyer's remorse when you realize you can't afford what you've just bought.
You experience low self-worth
If you don't feel good about yourself, it can be easy to fall into the trap of using shopping to improve your self-image. You might buy new clothes, and makeup, or get your hair and nails done, in a bid to make yourself feel better.
But you may fall into debt if you can't afford these splurges. And this can cause problems for our psyche, including lower self-esteem and impaired cognitive functions.
You feel anxious or depressed
Anxiety and depression are common emotional triggers for spending. If you're worried or are generally low, you may try to ease these feelings by buying something new.
But attempting to balance mental health conditions through spending is only going to add to your financial woes in the long run.
A better alternative is to seek help from a counselor.
You feel angry
If you've ever turned to shopping when you're angry, you're not alone. Whether you're raging about your boss, a friend, or a family member, spending can be a way to lash out and make yourself feel better.
Of course, this will only make your financial situation worse and will leave you feeling even angrier when you realize what you've done.
You experience mania and hypomania
Mental health conditions like mania or hypomania make it challenging to keep your finances in check. If you're going through a period of feeling manic or hypomanic, you might find yourself making impulsive purchases.
It's important to seek help from a medical professional if this sounds like your experience.
You're stressed out
When you're stressed, it can be hard to think straight. This means you might make decisions - like buying something new - that you wouldn't usually make.
While it might feel like a great idea at the moment, this will likely add to your stress levels in the long run.
You are bored
When you’re bored, your brain is actually seeking out stimulation. Danckert and Eastwood, authors of "Out of My Skull: The Psychology of Boredom,” describe that “boredom occurs when we are caught in a desire conundrum."
In this state, you might be more likely to give in to temptation and spend money, even if you can't really afford it.
You experience loneliness
If you're feeling lonely, it can be easy to try and fill this emptiness by going shopping and buying things. Even being in a busy shopping mall can help you feel less lonely.
It's great to seek out new social settings, but spending money you don't have will worsen your financial situation.
Instead, try to attend social events, make new friends, and enjoy activities that don't affect your financial goals.
How can emotional shopping impact your financial goals?
One of the primary reasons to be wary of emotional spending is the negative effect it can have on your financial goals.
Whether you're saving for a house down payment, planning for retirement, or want to book a family vacation this year, all of these goals require a budget. And if your budget gets wiped out by a shopping splurge, you'll likely fall behind on your plans.
You might not save as hard or fast as you'd hoped and rely on credit cards to cover essentials like groceries. Getting into debt is another worst-case scenario due to the impact of emotional spending.
How to deal with emotional spending
Do you suspect that emotional spending is an issue for you? Be honest! But good news - there are many strategies you can follow to curb your overspending.
Find out what makes you want to spend
The first thing to do is to get to grips with your own psychology and understand why you're spending so much and the exact triggers that make you do this.
Look through the list above and determine if you shop when you're feeling stressed, sad, angry, etc. If you're unsure, try keeping a spending journal for a few weeks to help you identify any patterns.
Indulge in healthier habits
Once you understand why and how you’re drawn to this type of reactive spending, the next step is to get ahead of it. Reroute the energy you would spend on shopping and put it to better use.
Another great tip is to call an accountability partner whenever you’re about to spend. They’ll remind you why this isn’t a great plan and help you stay on track with reaching your financial goals.
Make it part of your financial plan
If you are still partial to the idea of a bit of a splurge but want to do it in a controlled manner, work an emotional spend budget into your monthly allowance for yourself. Keep the figure reasonable and make sure you can afford it and that you won't go over it.
Be aware that this step requires quite a bit of discipline. So if you feel you're likely to ignore your limit, this isn't the right strategy.
Take action to curb your emotional shopping
Do you need to be physically stopped from emotional shopping? Try building spending barriers into your life to prevent you from spending.
Some options are:
Remove shopping apps from your phone
We spend so much time browsing on our phones, and shopping apps make it all too easy to purchase items you don't need at every mood change.
Use browser blockers
If you can't trust yourself not to visit your favorite online stores, install a browser blocker. You can still use the internet, but won't be able to access the sites where you typically spend the most money.
Freeze your credit card
Looking to take drastic action? You’ll love this tip. If you quite often use your credit card to make impulse purchases, put it in a Ziploc bag and place it inside the freezer!
This will stop you from using it on a whim and make you think twice about any purchases you really want to make.
Try a no-spend challenge
During a no-spend challenge, you'll intentionally not spend any unnecessary money for a set period. It can be any amount of time from a week to a month, or even longer. The idea is to reset your spending habits and get out of mindlessly spending.
A no-spend challenge is a great way to focus on your financial goals and get control of your finances.
It might be challenging when you begin but stick with it, and you'll be amazed at how much money you can save.
Swap spending for selling
Ever noticed how much clutter you have because of your emotional spending? A great way to get rid of this is to have a garage sale or sell some of your items online.
This will clear out your space and give you a bit of extra cash to put towards your financial goals.
If you notice any of the triggers that would normally make you spend, flip the script and plunge your energy into selling instead.
Attach emotions to saving
If you notice a dopamine rush every time you buy something, or even in anticipation of buying something, know that you can experience this release in other ways.
Dopamine is also released when we exercise, accomplish a goal, or do something nice for ourselves (or others!)
Instead, take note of how you feel when you save money rather than spend it.
To get the rush going, give yourself a little reward every time you hit a savings goal. Perhaps you'll book a massage every time you save $1,000 into your pot or go on a weekend getaway once you've saved $5,000.
You'll get to the point where you get a rush every time you check your savings balance and see it going up, up, up.
Put an end to your emotional spending
If you want to get a handle on your finances, take a good hard look at your emotional spending habits.
If you are struggling, reach out to a financial planner or therapist who can help you get to the root of your spending habits and develop a plan to change them.