Spending money when one is experiencing strong emotions, such as stress or despair, is referred to as emotional spending (also known as retail therapy). It frequently leads to the purchase of things you don't actually need or even want.
While online shopping offers convenience and plenty of options, it can also be an easy source of stress and anxiety when comparing the price of the item you want to your bank account balance or credit card bill.
Mental health professionals claim that this is a coping method used to avoid confronting those challenging emotions, although there are many other ways to handle it.
In fact, a study data shows that 62% of consumers have bought something to make themselves feel better.
If you find yourself turning to shopping when you want to relax or cheer yourself up, it's time to get control of your finances before you run into financial trouble.
When you find yourself succumbing to stress-induced financial decisions, like emotional spending, take a step back and look at these suggestions on dealing with emotional spending before it gets out of hand.
What Is Emotional Spending?
It's different from planned shopping or buying things you need; it's more about buying things you don't need or even want because of an emotion. Sometimes, emotional spending is called retail therapy or impulse buying. —is a common problem for many people.
You might buy something to cheer yourself up after a bad day or reward yourself for getting through a tough time—but sometimes these purchases can lead to more significant problems if they become habitual and out of control.
Understand Your Emotional Spending
The first step in understanding your emotional spending is identifying what's causing you stress and anxiety. It could be a problem at work, family issues, or relationship problems. Once you've identified what stresses you out, it can help you understand why spending money helps relieve these feelings.
Related: How to Stop Emotional Dumping and Start Healthy Venting
If you don't know where to start, try writing down three things that stress you daily. You might also want to keep track of how much money you spend on certain things when you feel stressed. Keep a journal for one week—you might be surprised by what you find!
This will give you a better idea of how much stress and anxiety affect your financial wellness.
How To Recognize & Avoid Emotional Spending
If you're feeling stressed, it's natural to want to do something about it. Unfortunately, sometimes that means making a trip to a store (online or otherwise) and treating yourself—and your bank account—to something new.
But if you don't recognize what's happening, you may spend more than you intended and get less of an emotional benefit than you would have thought.
You might find yourself engaging in emotional spending:
- Under stress
- Out of boredom
- If feeling guilty about something
- When surrounded by spendthrifts
When You're Stressed:
We all feel stress now and then, and sometimes that stress comes with a temptation to spend money. Of course, not every purchase we made when feeling stressed is emotional spending.
For example, it might be helpful to buy something new when your old pair of shoes causes you pain or need a good coffee grinder after getting up too early one morning. But if you notice yourself making unnecessary purchases more often than not, it may be time to take a step back and think about what's going on.
When You're Bored:
Sometimes boredom can drive us to do things we wouldn't normally do—like shop for things we don't need. If you find yourself browsing online while sitting at home on a Saturday afternoon, it might be good to ask yourself why. Are you looking for something specific, or are you just killing time? If it's the latter, take some time to engage in an activity that makes your brain work harder (like reading a book).
When You're Feeling Guilty:
Guilt is one of those emotions that tends to sneak up on us when we least expect it. We may not even realize how much guilt affects our spending habits until someone points out what's going on—or until we see our bank account balance after a few weeks of indulging ourselves because of guilt-induced stress.
When You're Surrounded By People Who Make Spending Fun:
Our friends are a great source of support and encouragement for many of us. They can even help us stay on track regarding financial wellness, but only if we let them. If your friends love shopping as much as you do, you might be in danger of getting swept up in their enthusiasm—even if it's for something you don't need or have already bought.
Steps To Recognize Emotional Spending And Attain Financial Security
Stress and anxiety can be some of our most significant triggers for impulsive shopping. But, once we recognize them as such, it becomes easier to control these impulses. Work toward financial security by developing a budget that doesn't include an entertainment category, checking your credit card bills for impulse purchases each month, and questioning whether you needed what you bought.
- Practice financial wellness
- Make a budget
- Break the shopping habit
- Find healthier ways of coping
- Reward yourself in ways other than spending money
Put A Plan In Place:
It's important to do whatever you can to practice financial wellness. Even if it seems like a part-time job, developing and adhering to a budget is imperative for those prone to overspending. Take care of your money first; don't let it take care of you.
Make An "Emotional Spending" Budget:
If you tend to overspend when you're stressed, using a budget that includes an emotional spending allowance might be helpful. It will help you monitor your spending and give you a place for non-essential purchases—or allow for some discretionary spending in your overall financial plan.
Monitor your spending carefully, though; sometimes, knowing that there's money set aside for emotional purchases can make people spend more than they would if there were no budget.
Stop Coping Mechanisms:
If you use shopping as a coping mechanism, it might be time to find healthier ways of dealing with your emotions. Shopping can become a habit and, while it can be fun, it's important to make sure you aren't spending money you don't have.
Find Healthier Ways To Cope With Your Emotions:
Finding healthier ways to cope with your emotions will help you avoid spending money when stressed. If you usually turn to shop to deal with stress, consider turning in another direction instead: meditation, listening to music, exercising, and journaling are all good alternatives that can be done almost anywhere.
Pause For 48 hours:
Give yourself 48 hours to consider a particular purchasing decision and how it may affect your monthly spending plan. During the 48-hour window, consider your need for the item and whether it is truly worth the cost to you. The 48-hour guideline will typically assist you in being more impartial while making purchasing selections.
Take Time To Reward Yourself:
Financial wellness is critical, and it's not enough to simply reduce your spending. Finding a balance that keeps you financially independent while still allowing you some rewards and entertainment is key.
If shopping sprees have become more important than friends and family, it's time to change. Take time out of each day—even just 10 minutes—to reward yourself in another way (an ice cream cone, visiting a park) that doesn't involve money.
Can Emotional Spending Be A Psychological Disorder?
Compulsive shopping can be a symptom of a real psychological disorder, professionally referred to as Oniomania.
Treatment for oniomania includes intervention followed by support group therapy and one-on-one psychological sessions.
Remember, you are not your emotions. Your true identity is inside you, and your emotions only have as much power over you as you allow them. When it comes to stress management and emotional spending, we must recognize these things for what they are. It's okay to feel stressed, anxious, worried, and afraid; what is not okay is giving in to those feelings by making purchases we do not need and cannot afford just because of how we feel at a certain time.