Life is not sunshine and roses all the time. It has its ups and downs, maybe you got a grade you didn’t like or perhaps you lost the promotion you were expecting. You feel sad, demotivated, and maybe a bit lonely. So instead of wallowing in sadness, you get that designer bag that you have been eyeing, or maybe you think it’s time to upgrade to a PS5.
And when your feelings get the best of you, you start losing money. I.e., emotional spending.
What is Emotional Spending?
Emotional Spending is basically retail therapy; it’s when everything feels like it’s too much and you find the answer in your bank account. It’s a temporary fix, a “happiness pill”, that takes away unwanted feelings. When done in moderation, it’s okay, but when you overdo it, it breaks the bank.
Get a Grip!
To break this habit, you have to find out the reason why you’re doing it and be aware of your triggers!
Your emotions are the main cause of it. They could look like anxiety, (financial) stress, depression, jealousy, boredom, and loneliness.
Other than your emotions being the driving force of your spending habits; FOMO marketing is another way that triggers it. That’s when you’re shopping and all you see is that little caption that says “only 2 pieces available” or when you buy something you don’t need only because it’s “limited edition”.
To break the cycle, you’ve got to ask yourself; do you want it or do you need it?
In the heat of the moment, you’ll be like “I really do need it!!” But, do you really need to buy 12 online courses in the span of 24 hours just because they happen to be on sale?! No. Not that I am speaking from experience or anything, because why would I ever buy a course about flipping furniture when I don’t even have furniture to flip?! It’s insane!
So, before you bankrupt yourself to the ground, give yourself a day or two and see if you still want to make that purchase.
In the case of emotional spending, look at your bank statement. You’ll be surprised by how many purchases you’ve made that you don’t even remember. These items are not worth it. Again, totally not speaking from experience!
Lastly, and perhaps the most important tip I could give you is that it’s important to take note of how you feel. Personal finance could affect both your mental health and financial well-being. So, when it comes to your emotions; reflect, don't suppress.