How Can I Curb My Emotional Spending?
Please remember this is not financial advice!
☎️ In today’s episode, we talk about emotional spending. With January sales in full swing, temptation to splurge is everywhere. And while spending impulsively on occasion is okay, it’s important to understand that the rush we get from shopping is short-lived. If you often find yourself having a hard time trying to control your spending, or impulse buying to improve your mood, it might be time to take a look at curbing the habit.
💥Today on The Wallet:
1️⃣ Understand what emotional spending is and why it provides that all-too-familiar, albeit fleeting, feeling of the ‘shopper’s high’.
2️⃣ Find out why it’s important to be conscious of your emotions and the role they play in your spending.
3️⃣ Learn practical tips that will help reduce or completely stop your unintentional overspending.
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what is emotional spending?
Emotional spending is when you purchase a product or service in an attempt to feel good because you’re excited or to ease (or avoid) negative feelings. If you feel the urge to spend money to feel good, and find yourself making questionable financial decisions as a result, then you may be an emotional spender.
This kind of shopping is rooted in the brain’s pleasure-reward system. Buying things gives us a dopamine “high”, which is why, for some people, it can become highly addictive. Research from Stanford University has shown that when we see pictures of things we’d like to buy, the region of our brain associated with the release of dopamine is activated. Dopamine is released whenever we experience something exciting or new. This means that buying things provides us with an instant ‘hit’ of feel-good emotions. Once the dopamine wears off, we crave it again.
However, shopping can never provide us with long-term feelings of happiness. In fact, overspending on impulse can make us feel really bad about ourselves in the long-run, which re-starts the unhealthy cycle. Before we know it, we’re surrounded by ‘stuff’ we didn’t budget for, feeling guilty about our perceived lack of self-control and an emptier wallet.
is it ever okay?
Yes! Everyone enjoys a little retail therapy here and there, but it’s a worry when it becomes unmanageable, eg. when we don’t realise that we’re overspending, or we feel like we are no longer in control. If you don’t feel guilty about splurging on impulse and are still able to pay your bills, save, invest and stay out of debt – great!
But if you feel you’re losing control with this habit, it’s never too late to address it. After all, all of us can benefit from making our money stretch a bit further.
How do we stop ourselves?
The first step to overcoming emotional spending is admitting that you have a tendency to spend impulsively. Remember – there’s no judgment here, so don’t let those guilty feelings creep in! Once you’ve accepted the role your emotions play in your spending, it’s easier to start making changes. If you feel that your emotional spending is completely out of control and no matter how hard you try you can’t seem to stop, it could be worthwhile seeking help from a professional counsellor or therapist to help you get to the root of the problem. Money coaches can also help you with your money mindset and spending habits.
If, however, you are mostly in control but find yourself having occasional slip-ups, you can take steps yourself to break the habit. Here are 8 tips to help you:
Get to know your triggers – what emotions are driving you to shop? Do you shop when you’re procrastinating? After an argument with someone? When you’re stressed at work? When you’re bored and scrolling through Instagram? At night, when you’re in bed and need to relax? Getting an idea of your triggers will help you understand what emotions you’re trying to mask with your shopping. Keep an ‘impulse spending’ journal – the next time you find yourself about to click ‘Buy’, write down the context (eg. I’m stressed because my to-do-list today is super long). Soon, you’ll begin to see a pattern, which will make it easier to recognise when you are feeling ‘off’.
Find alternative ways to de-stress or feel good – when we’re feeling something we don’t really want to be feeling, we naturally look for ways to avoid it and feel better instead. The key is to find healthy coping mechanisms for dealing with this. For example, when you feel stress creeping in, you could go for a quick 10-minute walk or spend 5 minutes on a deep breathing exercise. If you are feeling FOMO about some friend’s or influencer’s life, write down a gratitude list of 10 things you’re grateful for that day.
Always have a budget - It’s no use telling yourself that you can never spend on impulse. When things are straight out forbidden, it can be even harder to resist the temptation! Instead, make sure you have a budget - you can use the 50/30/20 rule, or something else that works for you. Having money to spend on ‘fun, non-essentials’, knowing exactly how much you have to spend and tracking that spending will help keep you accountable. Just allow a pot in your budget for impulse spending and set a shopping date in your calendar.
Delete shopping apps from your phone and unsubscribe from marketing emails. Instagram can be a big trigger too, so make sure you only follow accounts that make you feel good.
Before buying something, weigh up the pros and cons – “shopper’s high” can interfere with healthy decision-making. Write a list of pros and cons and sleep on it, so you know you’re spending for the right reasons. Ask your partner or a friend about their opinion, and if you still want it, see if there’s a cheaper alternative out there (eg. on eBay).
Only buy items that have been with your wish list for at least 2 weeks – this makes your spending intentional. Keep a Pinterest board or have a physical written down list, whatever works! If you find that after two weeks you still want the item, and that it’s within your ‘non-essentials’ budget, you can go for it.
Challenge yourself – set yourself a challenge of not buying anything new (non-essential) for two weeks. This is a good way to test your resolve and be impressed with just how much you can save in a short amount of time!
Connect with your values – Zoom out and think about the big things. What kind of impact do you want to make on the world? What kind of person do you want to be? What are your priorities in life? These are big questions but when you connect with your values on a day to day basis, you think less about the quick-fix, superficial things that might make you happy, and instead focus on the things that truly matter.
It’s powerful to acknowledge that something is causing you harm and to take action against it. Remember, not spending money is not a sacrifice, but an opportunity to allocate the money somewhere else, eg. my personal preference: long term savings and investments.