How to Prevent Emotional Spending
Nov 23, 2022
We've all been there before - when we're feeling down, stressed, or just plain bored, we turn to shopping as a way to make ourselves feel better. Unfortunately, this can often lead to emotional spending, which can quickly spiral out of control and leave us in a mountain of debt.
What Is Emotional Spending?
Emotional spending is when people spend money in response to their emotions. This can happen in response to both positive and negative emotions. For example, someone might treat themselves to a new outfit after getting a promotion at work. On the other hand, someone might make an impulse purchase after a breakup. In either case, emotional spending is motivated by a desire to make oneself feel better.
Research shows that the brain releases dopamine in anticipation of a reward. The shopping experience that starts with browsing for items to purchasing them, unboxing or waiting for them to be delivered to your home is all part of a pleasurable experience for many people.
However, this type of spending often backfires, as it can lead to financial problems down the road. However, the rush of good feelings that a person experiences during emotional spending don't last, and the feelings of unhappiness they had before still linger. Therefore, one must be aware of one's emotional spending triggers and find other ways to cope with difficult emotions.
How Emotional Spending Can Impact Your Financial Goals
Emotional spending is a common trap that can impact your financial goals. When you're feeling down, it's easy to rationalize a purchase as a "pick-me-up." However, this can quickly lead to debt and frustration. If you're not careful, emotional spending can sabotage your budget and make it difficult to reach your financial goals, like saving to make a down payment for a home or paying off debt.
What Are Some Common Triggers for Emotional Spending?
1) You want to feel pride.
You may want the admiration and appreciation of other people. You may look for others to respect and see your rise in social status, and admire your outstanding achievements. For these reasons, emotional spenders may want to feel this pride by buying expensive items to show that they have attained high social standing in society. They may buy expensive jewelry, watches, shoes, and other items to show them off on social media photos and videos.
2) You want to validate yourself.
Some emotional spending habits occur due to the need to be validated by others in their choices and decisions. These people usually doubt and lack the self-confidence to make choices, and they struggle to make up their minds for fear that they will make the wrong choice. Such emotional spenders are likely to listen to other people's opinions and the so-called 'experts' recommendations while making impulsive purchases.
3) You feel guilty
Guilt may take center stage in your life when you feel like you have failed to achieve a goal, like missing a deadline or failing a test. When you feel uncomfortable within yourself, seeking comfort through other unnecessary spending habits is easy. Instead of finding different ways to improve, you will spend time and money ordering expensive takeout food or gadgets as a sympathy treat. Those small "treats" can help ease your emotions for a short time, but repeated bad habits can push your budget into the red.
4) You want to be a leader.
Being a leader, in this case, is the appeal to be the first to own or try something before other people. Marketing messages always target the feeling of being unique in owning their products. This need to be a pack leader can drive emotional purchases. For example, you can purchase a specific phone model to say, "I was one of the first person to have that kind of phone in my family or clique of friends."
5) You are fearful
Fear is a common emotion that not many people like to feel. It happens in life situations like a challenging new work project or being anxious about a presentation to a new client. It's normal to want to avoid your fears because you are hardwired to protect yourself. Fear can drive emotional shoppers to spend on unplanned items to calm and reassure themselves. This method is counterproductive because it stops you from improving the project, and you spend money you didn't have on an impulsive purchase.
6) You are grieving
If you have experienced a bereavement, looking for ways to get distracted from your grief is natural. Shopping can be a distraction that can put you back in control, following a situation where you may have felt powerless.
Yes, grief shopping is entirely understandable, but exercising good judgment and staying in control of your finances during this difficult time is essential.
7) You feel sad or depressed.
You have likely felt sad, as many of us do. Being sad may be sparked by a detrimental event or waking up in a gloomy mood. Emotional shoppers buy new items to temporarily lift their spirits by buying their favorite things- makeup, new clothes, kitchen appliances, and more. However, this purchase cuts personal budgets and will briefly make them happy. Another reason is that we live in a society that tells us that happiness comes from buying things.
8) You are jealous
You may see a friend or someone with a handbag or phone model better than yours or one you've wanted for a while. When envy kicks in, you may decide to go shopping for things you don't need.
9) You want to belong
The most common desire as people is the desire to belong. Humans are social creatures, and we naturally desire to feel like we are part of a group. This feeling can be amplified during stress or insecurity when we seek comfort and reassurance. Unfortunately, marketers know how to play to this need and advertise their products with messages like 'join the tribe.'
10) You're stressed out.
We all experience stress from time to time. Stress can come from work, relationships, finances, or other areas of life. When we are stressed, we may seek comfort in unhealthy coping mechanisms like emotional shopping.
11) You are bored
When you feel bored, your brain will seek out stimulation. Danckert and Eastwood, the two authors of "Out of My Skull: The Psychology of Boredom," say that "boredom can occur when you are caught in a desire conundrum." This means that you're in a place looking for something exciting to do. In this state, you might be likely to give in to temptation and spend money, even if you can't afford it.
12) You experience loneliness
When you feel lonely with no one to talk to, it is easy to try and fill this emptiness with activities where you will see other people. The shopping mall may help you feel less lonely and increase your emotional spending habit. Despite feeling lonely, emotional spending can be damaging to your financial health. It's important to seek out your family and friends as one way to cope with this emotion so that you don't end up in debt.
How To Prevent Emotional Spending
Transforming your relationship with money is tough, especially when you are used to spending your money based on your emotions. Here are some useful steps to help you identify and manage your emotions so that you can begin creating healthier spending habits.
1) Identify your triggers
When you find that you are about to make a purchase that looks like it will slant toward emotional spending, question how you feel and try to identify the emotion. If you have a negative emotion like jealousy, anxiety, or sadness—ask yourself what purchasing this item will do for you. Is the commodity able to make these bad feelings go away? When you explore and become aware of your feelings, it will stop you from acting impulsively on your emotions.
2) Avoid impulse buys
Another tip is to try and delay your purchase. If you're feeling the urge to splurge, wait 24 hours before you actually make the purchase. This time is useful for cooling off and assessing whether you really need or want the item. If after 24 hours you still feel like you must have it, go ahead and buy it. You can also give yourself another 24 hours to think about it. After giving it some thought, you may realize the purchase is not worth it.
3) Find other activities/Indulge in healthier habits.
When you engage in emotional spending, you usually tap into the "feel good" hormones- like dopamine- released as you go shopping. These good feelings provide an instant reward, which explains why emotional spending is such an appealing habit.
However, there are healthier and less expensive ways to release those happy feelings. Find activities that make you happy and help you relax. These can include the following:
Go for a walk or a jog
Play your favorite sport
Meet up with a friend for coffee
Take a warm bath
Watch your favorite movie or TV show
Meditate or do Yoga.
Read a book
By taking care of yourself emotionally, you'll be less likely to turn to shop as a way to cope.
4) Make a budget
Emotional spending is not always negative, and it is acceptable to reward yourself with something special as self-care. The problem begins when you act on your emotions constantly and end up overspending or making purchases without thinking rationally.
Creating a budget will help you keep your impulse buying in check. Budgets allow you to engage in emotional spending from time to time and more consciously. You can start by picking a monthly or weekly amount you can afford to spend and stick to it.
This will motivate you to pay closer attention to your spending and make it easier to save money for things that are truly important to you.
5) Freeze your credit card
When paying with a credit card, it is easy to spend more than when you're paying with cash. This is because using a credit card eliminates the need to pause and determine if you have sufficient cash in your wallet to cover the transaction. Using a credit card often leads to high amounts of consumer debt that must be paid back.
By freezing your credit card, you prevent yourself from using it impulsively because it does not pay for new transactions. This forces you to think twice before making any purchases, and it's a good way of setting some boundaries for yourself. Start by turning on alerts, so your card issuer informs you once you've hit a certain dollar spending limit. Confirm your balance daily to ensure you don't exceed a certain amount. Additionally, treating your credit card like a debit card can be helpful by only spending an amount balance in your checking account and freezing the balance after that.
6) Try a no-spend challenge.
Another popular solution is to try a no-spend challenge whereby you challenge yourself not to spend on unnecessary items for a week or month. Instead, you can set aside a certain amount of money every month to save and watch it grow. This can produce feelings of excitement, happiness, self-confidence, and control over your finances. For more chances of success in this method, automatically transfer your money into a savings account every month, so you don't have to think about it.
7) Swap Spending for Selling
Another solution is to try swap spending for selling. Instead of buying new things, why not try and sell some of your unwanted belongings instead? This will declutter your life and help you to earn some extra cash that you can use responsibly. You may surprise yourself with the amount you earn by getting rid of some of your old junk!
8) Set money goals
While there may be no magic solution to emotional spending, setting money goals can greatly help. Money goals are those that govern how much you'll save and spend. They provide something to focus on and provide a sense of purpose. They also assist in helping you stay on track and make financial decisions that align with your values. By setting money goals, we can begin to take control of our spending and find more joy in our lives.
Wrap Up
Emotional spending is something many people struggle with, but it doesn't have to be that way. By understanding what triggers your emotional spending and the emotions behind them, you can put measures to help you avoid those situations. There are many ways to prevent emotional spending, so find what works best for you and stick to it.
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