ARE YOU AN EMOTIONAL SPENDER?
After a bad day, it can feel good to go out and treat yourself. Whether that’s buying yourself a new pair of shoes, a nice meal at a restaurant, or a day at the spa, this type of occasional spending can help a person cope with the stresses of everyday life. Though this can be beneficial when done in moderation, there are times when many of us end up relying on these purchases to brighten our moods—a problem typically known as "emotional spending."
To help you better understand what this type of behavior is, we’ve answered some of the most important questions one might have about emotional spending, who it affects, and how anyone can work towards breaking the habit.
What Is Emotional Spending?
True to its name, emotional spending is a type of behavior that causes people to spend money whenever they're experiencing negative or positive feelings. Generally, it's used to fulfill whatever emotional needs the person has at the time, with the intention of helping them move on from any unwanted feelings they may be experiencing. This can be seen in cultural behavior across the world, as Gerald Zaltman from Havard found that nearly 95% of the spending we do in our lives could be deemed emotional.1 Because of this, it can have a big impact on a person's financial and mental health.
What Can Cause This Behavior?
Before breaking down the effect emotional spending can have on someone, it's vital to know the root cause of it. When people emotionally spend, it's typically in reaction to a negative emotion, like boredom, sadness, under-stimulation, or stress. Many attribute this to the release of dopamine that soothes a person's system when they make a purchase.
Sometimes, window shopping and just looking at possible purchases is enough. However, many individuals don't make this connection before they complete the purchase and subconsciously think that buying the item will make them feel even happier. This can then develop into a problem that becomes difficult for a person to regulate or recognize until they have spent well beyond their means.
What Does This Affect In a Person’s Life?
As with other types of compulsions, emotional spending says nothing about a person's character but more about their coping methods. Though many people purchase items to make themselves feel better on a bad day, when done in excess, it can do more harm than good and potentially lead sufferers to make purchases that they can't afford. For instance, with global household debt hitting an all-time high over the past few years, there is a greater chance that many people who emotionally spend may not have the funds to do so and risk going into debt.2
Since emotional spenders tend to spend beyond their means, this can make it difficult for individuals to hold onto their savings. This can then stand in the way of any future goals they want to work towards, such as buying a home or new car, setting up an emergency fund, planning for a child, and so on.
Though emotional spending can cause many financial problems, it can also impact a person's relationships. For example, those who are married or share their finances may see issues arise in their relationship if one or both individuals are emotional spenders.
How Can You Recognize This Problem In Yourself?
The sooner this behavior is recognized, the sooner help can be implemented, and spending can be minimized. Although one of these behaviors may not mean you have a problem, it’s important to take note if you often find yourself doing a handful of these things or if one of these is severe enough that it affects your daily and financial life.
Some of the top behaviors of emotional spending are:
You're spending beyond your means.
You withdraw from conversations about money because it makes you anxious.
You tend to have more packages and services delivered when you’re going through a stressful period. This could mean physical items, or it could mean eating out for two or three meals a day for weeks at a time.
You withdraw from the things that usually make you happy or do the opposite and suddenly invest far too much in new hobbies.
You try to hide how much money you're spending or get offended when it's brought up.
What Can Correct the Problem?
After recognizing that you might have a problem, one of the next steps is to try and control it. Luckily, there are many avenues one can take to curb the temptation of emotional spending, such as:
Identifying your spending triggers and avoiding them. For example, if ads on social media are your triggers, you may delete them or limit your time on them until you feel the problem is under control.
Removing your credit card information stored on your devices, so it isn’t as easy to make a purchase.
Making a weekly or monthly budget for yourself with the help of others to track your spending and identify purchases you tend to make as a result of your emotional spending.
Limiting the use of your credit cards until any debt is paid off.
Giving yourself a waiting period when making a purchase. Though you might want something in the moment, once you have a few days to think about it, you may realize you don’t actually need it.
Everyone is different, so not every method will work for every person. This is why it’s important to try a few out and see what you’re most comfortable with. If you find that your spending is still out of control, there are other options you can explore, such as seeking out a mental health or financial professional that can offer more guidance.
Final Thoughts
Emotional spending can be a difficult habit to kick. But instead of passing judgment on the behavior and feeling guilty about it, it's important for those affected by it to work to get to the root of why it happens and figure out what they can do to avoid it in the future.