By Rick Orford
Originally published on The Financially Independent Millennial and repubished with permission
Are you wondering how to avoid emotional spending and perhaps wonder what it is and how to break the addiction? Or, maybe you’re reading this article to make better money choices – even for people with a higher education level. The challenge is that your instincts play a vital role when making money to spend decisions.
There are many reasons to save money, such as investing in your future, saving for retirement, paying down a mortgage, and buying a car. But the financial decisions you make every day will directly impact your economic life now and in the future. Today, the choice also spells the difference between experiencing financial pain and a sizeable bank balance.
My experience with emotional spending
When I was younger, I found myself hanging out in malls, buying lots of stuff that, at the time, made me feel good. Today, if you browse for products online, you’re likely to find a pop-up ad with an intriguing offer and be tempted to purchase it. Indeed, it allows you to compete with other shoppers before the “limited time offer” expires. After the purchase, you end with a product you never use.
The same happens to me, even today. I get marketed too, like never before. And Marketers are aware of emotional spending habits, and they will spend millions of dollars in their ads to convince you that these products are beneficial. They prevent you from being bored, make you feel successful, help you attract a partner, among other things. These ads get carefully designed to manipulate your spending habits, and that’s how you end up as an emotional spender.
Fortunately for me, I eventually said enough is enough. And the following is what I learned in my 20’s.
What Is Emotional Spending?
Before you can break the emotional spending addiction, it’s best first to understand what it is.
Emotional spending is where you find something and buy it, but in reality, it isn’t the product or service you even really want. Think of it like going to the supermarket. You go to buy one or two items and come out with a dozen. Emotional spending may occur when you feel unhappy, incompetent, bored, or stressed out, etc.
After you spend money emotionally, it makes you happy about it.
And, there is nothing wrong with buying something nice for yourself. If you can afford it, and it’s within your budget, and you’ll use it, why not?
But, if your spending is out of control, learning to avoid emotional spending will be an essential strategy if you find yourself spending more than you wanted to on unnecessary things.
What Are The Signs Of An Emotional Spender?
- Numbing feelings – When you feel boredom, loneliness, anger, or sadness, shopping helps you manage such negative emotions.
- Financial stress – Credit card debt is a thing that’ll make you unable to regulate or stop unnecessary shopping for some things you don’t need.
- Meticulous planning – this is a situation where you spend much of your time thinking about your next shopping spree.
What Are the Effects Of Emotional Spending?
- Quality of life – An emotional spending addiction puts you and your family in a situation that puts the brakes on your quality of life. Going out for movies, holidays, or driving somewhere are some of the things you may not enjoy as a family. So after you pay for your bills or essentials, you’re out of money.
- Self-destruction – With excessive spending, you feel self-hatred, guilt, and shame over your habits. And because it’s hard to stop, you feel helpless and fearful. So, shopping gives you an adrenaline rush to help cover such feelings.
- Debt – Falling behind your bills, such as credit cards, is another issue resulting from emotional spending. Emotional spending enables you to struggle financially without savings, so you must avoid it at all costs! You only manage to pay the minimum balance on your credit cards without having any savings.
- Legal issues – Emotional spending makes you addicted to shopping. After some time, you may even find yourself breaking the law.
- Relationship breakdown – Constant spending may result in your friends, family, or partner, no longer trusting you. It may also result in arguments. Relationships result from trust and respect. But, your relationship could fail if you lack one of these elements.
Tips To Avoid Emotional Spending
Like any habit, avoiding emotional spending is not easy for most people to do. But some crucial steps may help you decrease damage to your wallet.
Get a side hustle instead
If you suffer from extreme emotional spending and want to break the addiction, look for a second job like a side hustle. It works best when you consider shopping more than a pastime, known as oniomania. With time, this addiction becomes dangerous, and your psychological characteristics from compulsive shopping are similar to those resulting from a chemical dependency.
Having a side hustle helps you rein in your spending habits because you’ll have less time to shop! However, it’s best if you were determined to address your impulse control problems or other emotions that cause you to go on those destructive shopping sprees.
Unfortunately, due to such a disproportionate number of purchases you make, you may find yourself with loads of items you have never used, and others have price tags still attached to them. Instead of having free time to go shopping when bored, get a job to help break emotional spending addiction
If you want to cut down on your emotional spending, avoid impulse buys. And by this, it doesn’t just mean not purchasing a new pair of shoes at the mall, just because they glitter!
It is common when shopping – either online or at a store – you find yourself buying things you didn’t come in to buy. So, it’s best to avoid such things.
If you want to purchase something, at least wait 24 hours or longer before deciding to buy it. Mostly, you will forget the moment you close your browser or leave the store. Indeed, I do this daily. I don’t even write down what I’m looking to buy. Instead, if I remember I need it tomorrow, then I’ll reconsider
On the other hand, if you find yourself still needing to buy the item, but you can’t afford it, postpone your purchase. With time, you’ll have been able to save up.
A solution to help you avoid impulse purchases is to have a wish list of all items you want to buy. These are things you can request on your birthday or other holidays. or buy when you can afford them.
Temptations will make you spend money you don’t have. So, opt to limit your exposure to all situations that might tempt you to into unnecessary spending.
For example, if you want to visit a mall, go once a month, rather than twice a week. And, if you have a problem shopping online, look for non-shopping websites to pass your time or look for other activities.
You may also find yourself spending more, especially when a particular individual is around – relative or friend – avoid scheduling time or activities that will make you pay.
Keep Ads At Bay
When browsing, try as much as possible to avoid exposure to ads. If you see an ad, and mostly you find yourself wanting the item, it becomes difficult not to buy it. Therefore, the less exposure to ads, the better as you won’t have the sudden need to get it.
Unsubscribe from marketing emails that send product catalogs in your mailbox. To further ensure you avoid such ads, get a program in your smartphone or computer that will block ads, and they will not appear on your screen.
Also, avoid receiving unsolicited credit and insurance offers by providing your details: social security number, date of birth, address, and name to opt-out prescreen. The best way is to have a device that will record television shows but skip commercials.
If you listen to a radio, choose an ad-free streaming or a public broadcast. But if you realize that your emotional spending is a significant problem, it would be best you give yourself a break from the magazines as they are often full of ads.
Choose Inexpensive Activities
Shopping should not be a form of entertainment or distraction. But if you find yourself shopping during certain moods (anger, boredom, etc.), identify the cause of the feeling that forces you to buy things.
To avoid such habits, try and look for a constructive alternative to deal with your emotions. Try to look for a way to end the stresses you experience every day. For example, if you’re experiencing problems with your boss or employees, call a friend to speak to or get some exercises at home.
However, if you have something to buy, choose a simple and inexpensive version. But remember, even the small purchases add up at the end of the month.
Make Yourself Responsible
The money you spend should be an amount that fits your budget. So, find ways you can make yourself accountable for the money you spend.
And remember, the people you associate yourself with maybe the best defense to use and reduce emotional expenses.
You can talk to these people and tell them you plan to spend less, so they have to give you a hard time buying unnecessary purchases.
Before you go shopping:
- Consider your wants and needs.
- Ask yourself if you even have a budget for it.
When you plan to avoid unnecessary spending, it means you have a plan for something better. For example, you might intend to replenish your emergency fund or save for a large car, an appliance, or a vacation. If you want to take this one step further, consider writing sticky notes, and put them on your credit card. Every time you want to spend on unnecessary items, the sticky notes will remind you. And, in the end, you will manage to break your emotional spending.
Create A Balance Sheet
A personal balance sheet helps you determine your net worth. The document can also point out if your emotional spending is impacting your finances. After you’ve created a balance sheet, stick to a budget that you can follow, no matter the situation you may experience.
It will also remind you that purchasing nice things all the time that you can’t afford is a no-win scenario. However, it doesn’t mean you should avoid buying something nice for yourself. Buy nice things, but only when you are sure your finances won’t suffer.
Create A Journal
Keeping a journal is a brilliant way to help improve your mental and emotional health. Journaling will help you manage your feelings and thoughts at all times.
Journaling may also be a great option to break your emotional spending since it helps you manage any stressful events, improves problem-solving, and enhances clarity. That said, journaling is a technique highly preferred in cognitive behavioral therapy.
Writing a journal helps you keep track of your day to day habits, such as impulse shopping. It’s a great way to help avoid emotional spending. Indeed, a journal can help you break an emotional spending addiction by finding events that bring on excessive spending habits. If you can identify those events and avoid them, it will be easy to fix the root cause of your bad spending habits completely.
Engage Only On Healthy Outlets
You might feel the need to shop because you are bored or feel like you waste time. Remember that spending your money to feel better doesn’t last. The problem will stay, but the money will vanish faster than you can imagine. After that, you end up experiencing a worse feeling and guilt.
In the end, you will realize that emotional spending is not a solution to help you avoid loneliness. So, curb the overspending by seeking out healthier options. For example, gardening, cooking, cleaning, or whatever else makes you happy and doesn’t cost a lot.
Breaking an emotional spending addiction doesn’t mean avoiding buying anything nice. If you don’t occasionally buy some nice things with your money, there would be no need to work hard for it. Understanding why overspending happens and cutting it out is the only way to break the cycle. And, in the end, it’ll be fun to spend the day without the guilt.