Understanding Emotional Spending and It’s Consequences
Emotional spending occurs when some strong emotion triggers you to buy something you think you need or something you don’t need at all. Any sort of emotion can trigger spending – when you’re happy, stressed out, depressed, bored, pressured, or insecure. When stress runs high and you seek immediate gratification through retail therapy, you may be headed for a shopping addiction. Shopping with a credit card adds to the hype because it feels like you’re getting something out of nothing. There’s nothing wrong with rewarding yourself with something nice every now and then, but spending should not be a way to cope with emotional stress or problems. It takes character and discipline to reign in your emotions and make sound financial decisions in challenging circumstances.
Advertisements appeal to emotion
Psychological studies show that people attribute personality to brands as much as we perceive a person’s personality. Positive emotions toward a brand influence consumer loyalty more than the brand’s attributes. Make sure that your brand preference is based on quality and value for money, not just popularity.
Limit your exposure to advertisements. Read a book instead of fashion magazines or watching TV aimlessly. Be cautious of persuasion from advertising or sales people.
Compulsive shoppers get a rush of endorphins when making a purchase which gives them a temporary “high”, similar to gamblers addicted to gambling. This could be followed by feelings of guilt or anxiety for not being able to resist the urge to shop and not knowing how to pay the bills after. Like any other addiction, it stems from a deeper personality issue or not being able to cope with stress or sudden change in a healthy and constructive way. Life events or sudden changes usually cause such emotions, like getting a promotion, sudden illness in the family or a divorce. If you are facing a difficult situation and feeling very emotional about it, acknowledge that your emotion is influencing your decisions. Resolve to face the problem and seek professional help if necessary.
Keeping up or showing off
Do you frequently spend time with shopping buddies and you absolutely have to buy the same things? Do you feel like you need to have the latest gadgets to impress your colleagues? Do you spend on home decoration so your neighbors will think you are well off? You may be using money to cover up some deep seated insecurity which is unhealthy.
Understand that the satisfaction you get from the attention or admiration of other people will be short lived and does not make you a better person. Understand why you are feeling insecure or talk it out with someone you trust.
Justifying spending with “I deserve it”
You may want to buy yourself a treat after a particularly stressful week at work. You may want to celebrate a promotion or a job well done. Instead of buying that designer bag or shoes, think of other ways you can feel good without having to spend a lot. Cook your favorite meal at home. Take a day off for a picnic with friends or family. Borrow a good book from the library. Take a long, warm bath. Exercise releases endorphins, so take a jog or ride a bike at a local park or around the neighborhood.
Include “rewards” in your budget
If you do not reward yourself every once in a while, you will only feel deprived or depressed which may trigger you to spend more. Set aside a small amount in your regular budget to reward yourself. You may spend this amount each month for small rewards, or you may save it up for some time for a bigger reward.
If you find an item you really want but you were not planning on buying, wait for at least 24 hours up to a week before you go back to the store to buy it. Delaying the purchase will give you enough time to ponder if it is really worth your money. If you forget about it as soon as you got home, chances are you don’t really need it. Delaying gratification will also make the reward more meaningful and you are likely to value it more because you had to wait for it.
The first step to curbing emotional spending is self-awareness of how emotions influence your decisions. Acknowledge what you feel instead of looking for distractions or instant gratification. If you cannot deal with it in a constructive way, there’s no shame in talking with a friend or seek help.