Emotions and Your Spending Habits
How Your Emotions Influence Your Spending Habits
You know whenever the feeling of frustrations come from work, life and just adulthood in general, I tend to partake in online shopping or take myself out to a nice restaurant to blow of some steam. I tend to do the same whenever I am celebrating a personal win and I want to reward myself. What about you? Have you ever bought something on a whim just because you were feeling stressed, bored, or even overly happy? This is called emotional spending, and it’s more common than you might think. Our emotions have a powerful influence on our financial decisions, often leading us to spend money in ways that don’t align with our goals. Take a moment and join me while we explore how emotions affect our spending and how our can build emotional resilience around money.
What Is Emotional Spending?
Emotional spending, also known as impulse spending, occurs when purchases are driven by feelings rather than needs or thoughtful planning. Similar to my example in the beginning, you might splurge on an expensive gadget after a tough day at work or treat yourself to a shopping spree to celebrate a milestone. While these occasional indulgences aren’t inherently bad, they can become problematic if they’re a frequent response to emotional triggers. This is where we need to recognize our emotions and consider creating a game plan for when the urge occurs.
Common Triggers and Their Impact
Stress: Stressful situations can lead to impulsive purchases as a way to seek comfort or distraction. In this situation the shopping only provides temporary relief and once the stress occurs again when tend to spend more.
Boredom: When boredom strikes and there’s nothing to do, shopping can feel like an easy way to pass the time. Hello online shopping when we are at our desk.
Happiness: Ironically, being in a good mood can also lead to overspending. We often reward ourselves during moments of joy without considering their budget. You know that feeling of sheer excitement after hitting a milestone or accomplishing a BIG win, yeah don’t feel guilty on this one, this is common.
All of the triggers are feelings most of us experience everyday. However we have to understand the triggers along with it’s impact because, over time, emotional spending can result in buyer’s remorse, credit card debt, or financial anxiety. Who wants to deal with any of that.
How to Develop Emotional Resilience Around Money
Pause Before Purchasing: When you feel the urge to spend, wait 24 hours. You can also plan a spend day, allowing yourself to allot a certain amount of money to spend with no remorse. This gives you time to reflect on whether the purchase is necessary or if you really want to commit to taking the time to shop.
Identify Your Triggers: Keep a journal of when and why you spend. Understanding patterns can help you address the root causes. What gives me a reality check is when I go through my monthly statements and realize I spent to much.
Practice Mindfulness: Before reaching for your wallet, ask yourself, “What am I feeling right now?” Redirect your emotions with healthier coping mechanisms like exercise or talking to a friend.
Make sure you stay on top of how you are feeling and recognize that there are many ways to celebrate and release frustrations outside of shopping or spending money. Think of things that bring a return and fun things to do that are free. Now with inflation rising we should consider everything within our budget.
Lastly, by recognizing the connection between our emotions and spending habits, we can focus more on making intentional financial decisions.