Stop Emotional Spending

Do you buy more when you’re

stressed, angry, sad or bored? You

could be an “emotional spender”.

Here’s how practicing money

mindfulness could help, according

to the experts.

When you’re upset, stressed or

worried, is one of your first thoughts

to buy something to cheer yourself

up? If so, you might be an “emotional

spender”. This might’ve become even

more of a habit during lockdown,

where we were unable to reward or

commiserate ourselves with

experiences in the outside world and

so placated our feelings with online

shopping and deliveries. And now,

amid a cost of living crisis, many of us

are finding ourselves riding

the “treatwave”.

If this sounds like you, don’t worry.

“Emotional spending” isn’t

necessarily a bad thing, and is actually

the norm for most people. We may not

be aware of it at the time, but feelings

of hope, fear, guilt, shame and

boredom can all play a significant role

in constructing our financial habits.

“How we view money is tied to

memories and experiences. It’s

complicated and emotionally

charged,”

To truly understand our spending

habits, we have to accept that more

often than not, our emotions try to

hijack our behavior around how we

spend our money. For example, if your

family had to be conservative with

money when you were younger, you

may be more likely to splurge once

you gain financial freedom to make up

for it.

“How we grew up, our childhood

experiences around money, what cities

we live in, what media we consume,

who we spend our time with, and what

we do for work all have a massive

influence on how we spend our

money, whether we realize it or not.

Our emotions absolutely affect our

spending.” “We associate shopping

sprees and treating ourselves with self-

care and reward, which there is

nothing wrong with from time to time.

However, this can become an issue

when spending large amounts of

money becomes associated with being

happy.”

Is emotional spending a bad

thing?

Not necessarily, retail shopping, can

be beneficial as it can reinforce a

sense of personal control over our

environment, ease feelings of sadness

and feel like a positive personal

achievement. The same study also

concluded that the act of shopping can

simulate our senses and ease feelings

of anxiety.

However, when spending money

becomes the primary outlet for

regulating and managing your

emotions, that’s when problems begin

to arise.

“Money is the leading cause of stress,

ahead of even work or relationships.”

“Stress over a long period of time can

cause mental health issues.”

Emotional spending, in her words,

“can be a vicious cycle if left to run

wild.”

What are the dangers of emotional spending?

Emotional spending is either digging

you into debt, preventing you from

getting out of debt or preventing you

from saving for the future, you could

find yourself in trouble.

“The decisions we make today directly

influence the lives we lead tomorrow,

and emotional spending in the present

could be setting us up for financial

distress in the future.”

Even before the pandemic, the Money

and Pensions Service estimated that 9

million people in the USA were over-

indebted, and over 11 million adults

had less than $1000 in savings. The

pandemic and multiple lockdowns will

only have exacerbated this, due to a

loss of income or increased spending

out of boredom and to curb anxiety.

Emotional spending is a natural

response. “If you’ve found yourself

spending a fair bit of money during

the past 12 months, your emotions

could have had a part to play.”

“Take a person working from home

full time during the lockdowns,

isolated and unable to do the ordinary

things in their routine that help them

stay happy and grounded. What can

this person do to reward themselves

for their hard work when they’re

unable to go out or see friends? They

may take to ordering one or two

takeaways a week or ordering more on

their shopping list to treat

themselves.”

How to be more mindful when emotionally spending, the key is accepting that not all of

our spending decisions will, or have to be, 100% logical. “It’s not about only making the

“right” money decisions, but as long as we make more good decisions than bad ones,

we can feel pretty confident in our finances.”

So how can you tell whether you’re

spending mindfully or emotionally?

“We need to create more space in the

purchase, from the first thought

process to the credit card swipe.”

“Many times we don’t even ask

ourselves these questions and our

spending decisions are done on auto-

pilot, which means emotions are

probably in the driver’s seat. Ask

yourself: do I need this or do I want

this? Am I ordering an Uber because

that’s what I always do or because it’s

late and an Uber is the safer option?”

“Take notice of patterns when you’re

spending impulsively and to excess.”

“Instead of tapping your card, be

mindful of what you’re actually

feeling. Sometimes you may just need

to talk it out with a friend or change

your environment to work through

these feelings instead of spending

excessively.”

However, it’s important to remember

that it’s okay to buy the shoes and

have the takeaway. “It’s only when

you’re noticing it is happening a little

too frequently that you might need to

take action.” Will this create other

financial problems. Will I need to

take money out of my emergency fund

to purchase this item.