Emotional Spending: What It Is and Why You Need to Avoid It

November 24, 2021

Many people enjoy shopping as it can help boost moods and reduce stress. It is common to give yourself treats to celebrate your accomplishments or as a way to cheer yourself up when you’re feeling down. And with irresistible deals like clearance sale signs in storefronts and deferred payment options, it can be very tempting to make a purchase. 

However, it can be an issue if you constantly allow your emotions to influence you into buying items you don’t need or that are beyond your budget. Before your spending becomes out of control and leads to large credit card debts, it’s wise to understand what emotional spending is and find ways you can avoid it. To learn more, read on. 

What is Emotional Spending?

Emotional spending is defined as purchasing multiple items during a period of heightened negative emotions. It often leads people to buy things that are unnecessary and they don’t truly want. It happens more commonly than you think and you might have experienced it yourself. In the United States, a study showed that 77 percent of respondents have engaged in emotional spending in some way. 

One of the reasons you emotionally spend is because it provides a sense of control when you are overwhelmed by emotions or have low self-esteem. Also, shopping helps with the body’s release of happy hormones such as dopamine, serotonin, and oxytocin. This provides a feeling of euphoria, which is why many people use retail therapy to lift their moods.

Harmful Effects of Emotional Spending

There’s really nothing wrong with buying yourself something nice, as long as you can afford it. But if it goes beyond your budget and you won’t really use it, spending your hard-earned money on an object that will give you temporary joy is not worth it. Additionally, emotional spending can be harmful to your long-term financial health.

If you always let your emotions influence your purchases, you might end up spending more than your finances permit. You can end up draining your savings just to keep up with your shopping habits and credit card payments. And if you can no longer settle your credit card purchases, your credit rating will suffer, severely compromising your ability to take a loan.

Emotional spending can also affect your quality of life. Since it can bring a lot of financial issues, you won’t have the financial capacity to enjoy other pleasures like going on vacations with your loved ones. All you will be concerned about is settling your bills, to the point that you no longer take care of your relationships. In worst cases, emotional spending can cause relationships with friends or family to break. Some people who have become accustomed to uncontrolled emotional shopping would ask their loved ones for loans. And because their habits have reached an uncontrollable degree, they can no longer afford to pay back their loans—which can lead to people distrusting them in the future.

Tips To Avoid Emotional Spending

Emotional spending can get out of control if you don’t learn to manage it. While you will always see tempting advertisements and offers, there are ways you can avoid letting your emotions influence your purchases. Here are some tips on how you can curb emotional spending:

Create a Journal

Emotional spending is driven by overwhelming feelings that you can’t manage, but journaling can help with that. This activity gives you the opportunity to process your feelings and thoughts and understand what is driving you to make a purchase. Journaling also provides a healthy outlet to handle stressful events to address them in a more positive way. 

For example, if you feel the need to buy the new fashionable shoes you saw someone wear, you can journal why you feel the need to get a similar item and discover the purchase is driven by jealousy. To address this by writing down at least five things you are grateful for. Through this exercise, you’ll realize how full your life truly is instead of focusing on what you don’t have.  

Take Your Time

Marketers want consumers to make decisions in an instant. To attract you to buy more and quickly, they offer many time-restricted deals and ways to delay payments at a later date. A good way to stay away from buying on an impulse is to delay the purchasing decision. By giving yourself time to let the excitement or the deal subside, you can make more logical choices. 

Since emotional spending has a lot to do with what you are feeling, you need to allow the emotions to settle. Usually, taking a day or two to think about the purchase allows you to assess if the purchase is necessary or something you really want. Overall, it will help you curb emotional spending and make a more practical decision.

Set a Budget

An effective way to control emotional spending is by setting a monthly budget that includes your occasional spending. Many people become emotional spenders because they would often restrict themselves from getting something they want. But if you allot a budget for such purchases, you can manage your finances better.

After considering your essential expenses and bills, allot a certain amount you can use to treat yourself. One example is getting something nice to mark special occasions like your birthday. If you enjoy celebrating milestones, keep a separate fund for moments that call for a celebration like when you get a promotion. This way, you have money waiting without spending beyond your means. 

Emotional spending is very common because it helps people manage stress and improve their moods. However, making it a habit can have a negative impact on your long-term finances. Fortunately, there are many ways you can avoid your spending from getting out of hand. By understanding the feelings that trigger your need to buy things you don’t really need or want, you can effectively curb emotional spending. 

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