What is Emotional Spending? Unlock Willpower

Emotional spending is spending money as a response to heightened emotions instead of due to rational needs. Some people call this “retail therapy” as they claim to feel better after buying something as a way to treat or soothe themselves. While the occasional splurge is not necessarily detrimental to your finances, when emotional spending is a regular occurrence or becomes unchecked, it can affect your financial wellness. It has been reported that almost 70% of Americans have admitted to allowing their emotions to affect their spending, and 76% of these have resulted in overspending. Thus, for the majority of people, emotional spending needs to be addressed to gain better control of their finances. Fortunately, there is help out there for emotional spenders by determining the problem and finding ways to overcome it.

From the term itself, emotional spending is triggered by emotions. Looking at this post on the psychology of spending money, it shows that these emotions usually come from anxiety, fear, jealousy, loneliness or guilt. The theory is that spending money provides a way of gaining some control when feeling less in control of life or as a distraction to negative feelings. In some people, even positive emotions trigger spending, as they may feel more inclined to splurge on oneself as a treat. Realizing these triggers is a step in the right direction. Being able to notice these emotions, and when they occur, can help you identify ways to either avoid them or reduce them.

When tempted to spend money as a response to emotional triggers, one way to avoid doing so is to find a different way of coping or reacting to the feeling. Being able to manage your emotions better or being more mindful can decrease impulse buying. After identifying your triggers, list down alternative responses. If you have identified anxiety, you can look up ways to calm yourself such as exercising or breathing exercises. If needing interaction is a response to negative feelings, opt for a walk in the park or find a free event. If you are not entirely ready to cut off all emotional spending responses, you can slowly do financial swaps such as choosing a less expensive treat or activities.

If you can avoid triggers in your life such as decreasing your stressors, you are on the right path. However, you can still be triggered by other external cues. Marketers use emotions to target their audience and utilize ads extensively. Although you cannot completely avoid seeing ads or promotions every day, you can still try to reduce this exposure. Use an ad-blocker for the computers you frequently use for studying or work. Unfollow or block brands you frequently find yourself buying impulsively from. Remove shopping and social media apps on your phone. Delete your payment information from shopping sites to make it harder for you to use your credit card.

Setting a budget is not an easy task but it is important to manage your finances well. Knowing how much money is going in and where the money usually goes is the first step to making a budget. Determine your income sources and note how much money comes in during a specific timeframe. Start tracking your spending in that same timeframe. Listing expenses can help you visualize how much you spend, and is a good way to recognize spending problems. Afterwards, determine how your money should be spent and stick to it.

Being financially successful not only entails well-managed spending, but also securing money for the future. While keeping enough money on hand for monthly expenses, it is recommended to have three to six months’ worth of expenses saved up in case of an emergency. Include savings and investments in your budget. Set automatic transfers to your savings account to save you time and keep you from changing your budget. Look into the top investing strategies to help grow your money, and transfer automatically, so part of your money is always sure to be where it needs to grow.