How to Navigate Emotional Spending
Emotional spending is when you buy something to make you feel better. (Even if you're telling yourself it's something you need.)
Oftentimes, it is a result of feeling stressed out, bored, under-appreciated, unhappy, or a variety of other uncomfortable emotions.
We all emotionally spend, whether we know it or not. The key here, is talking about emotional spending so that we all can become more aware of when the act of emotional spending is happening. Money is emotional and we just need to make sure we are finding a good balance between our budget and play money.
How Emotional Spending Impacts Your Budget
If you have money designated as “fun money” or leftover money towards the end of the month you don’t typically worry about, that can create this mirage or idea that we have more money to spend then we actually do and that’s where emotional spending can take over.
For example, let’s say at the end of every month I know I have $150 extra in my budget. If I’m focused on emotional spending and don’t take a moment to think about where that money is being spent, I could easily spend overspend in my budget. Especially if that money is usually available towards the end of the month, but I’m emotionally spending quicker than when I have the money.
Overspending could mean either overdrawing in your account that month or racking up unnecessary credit card debt with high interest rates.
Once overspending begins… Interest rate adds to next month’s repayment and this adds to changing my spending habits in other categories. It can get messy, fast. The result usually leaves myself and many other people with mounds of personal debt.
Spending money can easily become a coping technique when we are not feeling our best. It might make us feel better in the moment, but there is often a feeling of guilt that follows some time after making the purchase. The truth is when we think life isn’t going our way, making an impulse purchase or going against our budget in the moment feels like we’re taking control.
But the fact is whatever the “Thing” is that you think will make you feel better, doesn’t actually fix what’s stressing you out, so you end up back where you started emotionally, just this time with a bigger credit card bill and possibly the impulse to try buying the next “Thing” .
What can we do to rethink emotional spending?
It can be as simple as taking a moment to check in with how you are feeling when at a store or shopping online…
Try the HALT method. Ask yourself:
Am I hungry?
Am I angry?
Am I lonely?
Am I tired?
The HALT method allows you to consciously check in with yourself before assuming you need to buy something to fill those needs. The idea is to stop and think about your needs in the moment. There are links in the description below if you want to dive deeper into the HALT method.
Here are some other things you can do to help curb emotional spending and avoid those impulse purchases.
1. Make a list of new coping techniques. Find other things that can help clear your head, like going for a jog or walk outside, listening to music, taking pictures, making art with what you have at home. Keeping your brain busy on a new task can start to become the new way you find fulfillment.
2. Let the item sit in your cart. The rush of making a purchase can end before you even check out. A great rule of thumb that has helped me personally with keeping my emotional spending in check is if I’m shopping in the store, go find that item and put it in my cart first. If I get to the check out lane and still want the item, I will include the purchase in my budget. If I don’t get the same rush, I put the item back. When it comes to online purchasing, let the items sit in your cart for 24 hours before buying. If tomorrow you’ve forgotten about it or it doesn’t feel as good to buy it, you haven’t even broken a sweat emptying that shopping cart.
3. Start a journal. If you feel an urge to make an impulse purchase, write down your thoughts to help figure out what events happened that led to the moment of your desire to make those purchases.
4. Create barriers to easy spending. The harder you make it on yourself to complete an unnecessary purchase, the happier you and your budget will be. If you tend to overspend at a specific store or website, try removing your credit card information from being saved on the app or website so you have to consciously go get your card and enter it all in.
Remember, your financial health and emotional health work closer together than we think.
There is no shame in treating yourself—especially if it fits in your 30 percent income rule, just practice budgeting and saving for those bigger items or shopping spree.
