What is emotional spending?
Emotional spending is when you buy something as a result of feeling a strong emotion. It could be a negative emotion like sadness, boredom or stress and you shop to make yourself feel better. Or it could be a positive emotion like happiness or excitement, and you decide to shop as a treat for yourself.
Now there’s absolutely nothing wrong with treating yourself or buying things to make yourself feel good after a bit of a rubbish day…IF your finances are in order and you have overall control over your spending. The difficulty is (and the reason why we’re writing this blog) is that emotional spending can easily get out of control because you’re not necessarily thinking rationally – you’re acting on emotion. That means, before you know it, you’ve totally blown your monthly spending allowance and you’re in a pickle until your next pay day.
Luckily, it doesn’t have to be that way. You’re never going to fully cut out emotional spending because it’s part of our nature but there are things you can do to keep on top of it, so you keep control of your money.
How can I manage my emotional spending?
Step one: Be aware that emotional spending happens
As the psychologist Nathaniel Branden said, “The first step toward change is awareness”. It’s amazing what you can do if you can simply acknowledge and understand what’s happening.
For example, if you’re someone who has a bad day at work and immediately heads on ASOS when you get home for a bit of retail therapy, now you know what emotional spending is, you can start to recognise the pattern and redirect it to something more positive.
Step two: Wait 24 hours before actually making the purchase
If you still get the urge to buy something when you’re feeling some sort of emotion, try telling yourself that you can have it, you just need to wait 24 hours until you can buy it.
You might want to add things to a wish list if you’re online shopping, or simply take photos of the item in-store so you know you’ve marked it as something you’re wanting to buy, but by waiting24 hours you’re allowing the emotion to pass so you can think more rationally about whether it’s actually something you want or need.
A lot of the time, when the moment has passed, you won’t be too bothered about it and you’ll know you’ve swerved an unnecessary purchase – which is not only great for your budget, but it’ll make you feel pretty happy with yourself too!
Step three: Account for a treat fund in your budget
The first two steps are there to try to get you to cut the amount of emotional spending you do, and this final step is all about minimising the impact of any that slips through.
Because, like we said at the start of this blog, there is nothing wrong with treating yourself. In fact, we encourage it! You just need to make sure you have overall control, and the way to have overall control is to be one step ahead.
In the case of emotional spending, you can do this by accounting for it in your monthly budget. By adding a ‘treat fund’ and assigning a set amount each month, you’ve pre-prepared an allowance so you’re not left short when you do make an unplanned purchase.
If you need any help with budgeting, try downloading our app! It’ll help you manage your money month to month and our savings-savvy analysis tool will show you where you’re spending your hard earned cash.