Advertisers spend hundreds of millions of dollars annually with the sole purpose of separating you from your hard earned money, with products or goods you don’t need. These products are often positioned to feed on a fleeting feeling, or provide an illusion that your life will drastically improve if you buy it. You ever notice the guy driving the $90,000 sports car always is fit, handsome, and has a model of a wife/girlfriend in his passenger seat? Many men fall for that marketing, convincing themselves that $1,000 monthly payment on a quickly depreciating asset is worth the cost. If you have ever fallen for this form of marketing manipulation, you likely had a case of emotional spending.
What is Emotional Spending?
Essentially Emotional Spending is the result of buying items you don’t need, and in the worst case, don’t want, due to your current emotional state. Some people shop when they are stressed out, while others cope with boredom by pointing and clicking away online. It doesn’t just happen on negative events, though. Get a raise at your job? No better time to splurge on those expensive shoes at the department store than on payday.
Don’t get us wrong, we don’t believe there is a problem buying something for yourself every now and then. The challenge for many comes when you take away money from your allocated monthly budget which is planned for one thing to go somewhere else. The bigger challenge is when you emotionally spend when you are attempting to get out of debt. There is no need in paying off your credit card if you are going to run it right back up the next month.
How Do I Avoid It?
Avoiding emotional spending starts by stopping yourself from making impulse purchases. You have to make a conscious effort to not shop, and for some that means taking drastic measures, to include cutting up and closing credit cards once you pay each off, removing credit or debit cards from saved payment options on websites like Amazon or eBay, or practicing the will power to walk away from buying something when in a store. If you have ever found yourself going into a clothing store to pick up one or two items, and when you walk in, your eyes are drawn to your potential shiny new toy sitting in the front display, walk away. Practice walking away and waiting 48 hours (two full days). If you sleep on it for two nights, and wake up on the third day still craving that impulse item, then consider purchasing it only if it does not take away from your budget.
Another painless way to curb emotional spending is to unsubscribe from e-mails from retailers you frequently visit. We know some will argue and say that by doing this you will miss out on special sales, coupons, or promo codes to save money on future purchases, however… that is the whole point. Your brain is unconsciously programmed right now to spend, spend, spend. Some stores marketing departments are so good if you end up analyzing pricing of certain items, you will find that “sale prices” are often not a deal at all. If you want to avoid seeing advertisements on your internet browser, there are special add-on plug-ins that will block all ads from appearing.
If pre-approved credit card offers spike your spending, consider completing the Opt-Out Prescreen form. This ensures you will not receive any unsolicited offers for credit and insurance products. When it’s time for you to apply for credit, or shop around for better insurance rates, you will have to apply directly with the respective company, which after all, is how it should be anyway.
Making yourself accountable for emotional spending can be done solo, however if you have a close friend or family member whom you trust that you can share this with, it will be all the better. Some people have opted to be penalized financially ($20 fine) every time they make a purchase outside of their budget for a frivolous item. You may find yourself shopping out of pure boredom, and in that case some of the above remedies won’t be enough. You may need to look at alternative entertainment activities with friends or family, or picking up a side-hustle that could ultimately turn your idle time into money, instead of spending more of it.
Emotional spending that is not handled can turn into a shopping addiction, and with any behavorial addiction, it can take over and disrupt your day-to-day schedule in tragic ways. Nearly six percent of the U.S population is said to have a shopping addiction, which involves impulsive and compulsive spending. Both types of spending provide a temporary high at first, followed by a hard crash to reality and often guilt and emptiness.
If you believe you are suffering from emotional spending and it has become an addiction, consider getting counseling or therapy. Many people benefit from treatments, along with self-help books and groups and financial counseling.