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Have you ever bought something online when you were feeling down or pissed off, only to experience buyer’s remorse the next day?
What you did is what we call emotional spending.
A study by Qualtrics for Credit Karma found that 39% of Americans admit to being emotional spenders. So, what emotions are driving you towards spending money? And how can you prevent your emotions from taking over your financial decisions?
Let’s jump right in.
What Is Emotional Spending
We’re all guilty of buying stuff based on our mood at times.
In fact, it’s similar to reaching for comfort food after a rough day at work. Everyone has their own comfort food that they turn to after a rough day or during stressful times. Similarly, many of us also turn to shopping when our emotions run high.
So, what sparked this?
Credit Karma’s study uncovers that our emotional state heavily sways our spending behaviors. For instance, happiness tops the chart, pushing 29% of Americans to shop. Boredom is a close second at 28%, while depression came in at 22%.
These statistics prove that our feelings have a significant say in our spending decisions.
10 Catalysts of Emotional Spending
- Guilt
- Stress
- Boredom
- Nostalgia
- Loneliness
- Frustration
- Low Self-Esteem
- Sadness and Depression
- Happiness and Celebration
- Fear of Missing Out (FOMO)
While emotions might push us to spend, it’s essential to recognize when it becomes a problem.
And if it does, developing self-consciousness and reflection can help rein in our bad spending habits.
Gaining Control over Your Emotional Spending
Now, let’s explore how you can control your emotional spending by recognizing your triggers and making informed decisions.
1. Recognizing Your Emotional Spending Triggers
- Understand Your Triggers: Start a journal and write how you felt when purchasing the item.
- Avoid Retail Therapy: Uplift your mood by walking, visiting the gym, or reading a book.
- Reduce Ad Exposure: Unsubscribing from promotional emails can significantly affect your spending behaviors.
- Seek External Assistance: If you need help, seek help from financial counselors or therapists.
2. Practical Steps to Financial Discipline
- Set Financial Boundaries: This is where a conscious spending plan comes into play. It helps you to start making informed and intentional financial decisions.
- Go On A Digital Detox: Delete shopping apps.
- Create A Budget: Knowing how to budget your money is crucial. You have to know where your money is going.
- Question Each Purchase: Question and evaluate each item you intend to buy. Is it a “need” or a “want?”
- Hold Off for 24 Hours: Waiting a day before spending helps see if it’s worth it. More often than not, you might change your mind.
Managing your finances isn’t just about controlling your spending. It is also about making informed choices to pave the way to your dreams. In addition to controlling your spending, saving, and investing are just as important for your progression toward your financial goals and dreams. A big part of that is living within your means, which means spending less than you make.
And it all starts with being intentional with your life and money.
Keeping Your Emotions In Check For A Better Tomorrow
You hold the reins to your financial health.
Other than yourself, nobody can stop you from emotional spending. Nobody can make you do what you do not want to do. And if you’re serious about keeping your emotional spending in check, you have to take action to rectify it now.
So, are you ready for change?
Yes?
Practice what you’ve just learned to see the desired results.
Try it.
