WHAT IS EMOTIONAL SPENDING?
What is Emotional Spending?
Emotional spending is exactly what it sounds like: spending money in response to heightened emotions. These emotional purchases are usually impulse decisions fueled by emotions ranging from sadness, anxiety, stress, guilt, jealousy, and achievement.
However, not all emotional purchases are “the devil”. The occasional treat after a tough day at work or the pint of ice cream after a breakup can be a coping mechanism whose benefits outweigh the cost.
Emotional purchases cross the line when you begin to make a habit out of them. Habitual emotional purchases add up and can stand in the way of you achieving your long and short-term financial goals. If you are constantly feeling guilty about your purchases or are digging deeper into debt, these are signs that you’re making emotional purchases.
How to Overcome Emotional Spending
1. Understand Your Triggers
What emotions are you feeling when you make these impulse purchases? Do you like the endorphin rush that comes with buying the latest fashion trends? Is it the smile that the baristas put on your face each time you get a cup of coffee in the mornings?
Understanding the triggers for your emotional spending is the first step. From there, you can make small adjustments in your life to reduce this type of spending.
2. Find Alternative Ways of Coping with These Emotions
If you are serious about wanting to reduce your emotional spending, it’s important to find alternative ways of coping with your emotions.
Instead of using shopping to deal with stress, anxiety, and depression, try journaling, meditating, going for a walk, or talking with a therapist to control those emotions.
Instead of rewarding yourself by purchasing something, replace it with something that brings you joy. Maybe call up a close friend or relative to subtly brag about your awesome news or invest in yourself by practicing a hobby you enjoy
Check out this episode of the “Financial Feminist” podcast: Stop Emotional Spending
3. Stick to a Budget
Create a budget that allows you to cover expenses and contribute to savings, but still leaves some money leftover to indulge in these emotional purchases. Closely tracking your spending will ensure your main expenses are covered and remove some guilt for making additional purchases.
Some common budgeting strategies are the 50-30-20 rule, the 2-account system, or the zero-based budgeting technique. Personally, I use the Rocket Money app to set my budget goals and track my spending.
