Emotional spending: Spotting and Curbing

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    You must curb emotional spending if you're serious about building wealth
    Are you an emotional spender? Do you indulge in emotional spending?

    Are you indulging in emotional spending? Perhaps you’re spending on things you don’t need or want, just because of your mood?

    Is spending money an outlet to express your anger, frustration, guilt, happiness or any other emotion? You are likely to be an emotional spender if you answered yes to the last question.

    Now emotional spending is a major challenge for most people, because it involves making purchases based on your feelings. For example being unhappy with your appearance could make you decide to splurge on an expensive suit.

    And what about spending on that expensive appliance or gadget just because you got a promotion/salary increase?

    We live in a world that condones and even encourages materialism. Many believe, subconsciously or not, that buying the right car, the latest electronic gadget, or an item of clothing is the key to attaining happiness and success.

    People thus make purchases in anticipation of greater social acceptance, or to boost their self-image, self-esteem, or sense of self-worth.

    Retail Therapy is synonymous with emotional spending
    What is known as retail therapy is actually emotional spending pure and simple…

    Shopping purely for immediate personal gratification has been glorified and deemed “retail therapy”. And overspending is fairly easy to do in a world that provides easy access to credit.

    According to Alicia Fannin, there are seven pointers when one has a problem with emotional spending:

    Spending is your reaction to stress

    If spending is your immediate reaction to stress then you may be an emotional spender. Everyone enjoys a little retail therapy now and then. Emotional spending goes way beyond that.

    Whenever spending is always your reaction to stress then it’s likely you’re an emotional spender. Try to think of other ways to handle your stress such as going for a run or talking to a friend.

    You spend regardless of your financial state

    If you spend money regardless of your financial state then you may have a problem with emotional spending. This means you have no problem dropping thousands on a some item when you know that your rent is due.

    Moreover it’s a wrong to choose spending on an item over meeting your financial obligations.

    Don't spend money without taking your financial state into cognisance
    Emotional spending is spending money regardless of our financial state

    Justifying your purchases

    If you’re an emotional spender than you probably justify your purchases. You may think that you deserve something because you work hard or that you need something to soothe your hurt feelings.

    While it’s not wrong to enjoy what money can buy, it’s important not to look to things for total satisfaction. Remind yourself there are more important things in life than material possessions. Spending shouldn’t be your only way to deal with things.

    You know spending makes you feel better

    If you’re an emotional spender, then the chances are high you already know it. You know that you look to spending to make you feel better.

    You feel the need to keep up with others

    If you’re an emotional spender then you probably feel the need to keep up with others. You feel like you have to carry the right purse, wear the right clothes and drive the right car.

    It’s not wrong to want to have nice things. But it’s not good if your motivation to have them is so you can fit in with a certain crowd.

    Don't be driven to want to keep up with what others have.
    Do you spend money on things in order to keep up with others? That’s emotional spending

    You have to do damage control

    If you’re an emotional spender, then you probably find yourself doing damage control from time to time. This may mean that you have to borrow or juggle bills to cover your spending habits.

    Most likely you have some stress over your finances. You may even deal with that stress by spending more. This can lead to a frustrating cycle.

    You often have buyers regret

    Emotional spenders often have buyer’s regret. You know you shouldn’t have made purchases based on your emotions. You may not have even really wanted whatever it was you purchased.

    Buyer’s regret is a fact of life for emotional spenders. It’s something that you know you’ll have when you make the purchase yet you still can’t resist.

    Now that the scourge of emotional spending has been identified here are five major steps that can be taken to curb it:

    Avoid Impulse Buys
    One way to cut down on emotional spending is to avoid making impulse purchases. Whenever you’re at a store and you find yourself wanting to buy something you didn’t already want before you got there, don’t buy it. Wait at least 24 hours, if not longer, before making a decision about whether to buy the item. You’ll often forget about the item as soon as you leave the store.

    If, after 24 hours, you still really want it but a nagging voice in your head is telling you that you don’t need it or can’t afford it, try to postpone the purchase for a week or a month so you can think more clearly about the decision.

    Keeping your cards or carrying large amounts of cash around can trigger emotional spending

    Recognize Your Financial Triggers

    To most people even having a credit card on them is an invitation to spend money they don’t have—buy now, pay later, right? Yet, for others, the appeal of cash and its lack of accountability down the road—there’s no looming credit card statement to remind you of a poor decision—is too much to resist.

    Whichever group you fall into, recognize it and arrange your wallet accordingly. The less temptation you allow, the less likely you are to fall victim to it.

     Limit your exposure to advertising

    The media is awash with loads of messages all trying to convince you to part with your heard earned money. Advertising isn’t concerned with the fact that the product may not be essential, rather it seeks to convince you to go out and buy. Resolve to reduce its effect on your purchase decisions by limiting your exposure.

    Get support

    Let your family or friends know that you are trying to curb your spending habits. They can be the voice of reason when you are weak and need someone to remind you why you wanted to stop your emotional spending in the first place. We all need help in achieving our goals!

    Get support to defeat the scourge of emotional spending from those around you.
    Invaluable support is needed from those closest to you to curb emotional spending

    Limit Temptation
    Endeavor to limit your exposure to the situations that tempt you to spend. If it’s the mall, plan to visit only a couple times a year, or try shopping online instead. If online shopping is the problem, find other, non-shopping websites to occupy your time, or replace some of your internet time with another activity.

    If you always find yourself spending more when a particular friend or relative is around, try to schedule free or inexpensive activities with that person, like getting coffee, cooking dinner, or going for a walk.

    My focus here is not stop people from buying things and having fun, rather it is to make one more accountable and responsible when spending. Money spent unnecessarily means that there will be less money to be invested and multiplied.

    We all need capital to multiply in order to build wealth, hence there is the need to curb emotional spending. Unless you are already wealthy this is not the time to practice emotional spending.

     

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