7 ways to control emotional spending

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Resisting the desire to overspend when an emotional trigger hits was hard enough in normal times. Adding a global pandemic to the mix has made it even more difficult to resist emotional expenses.

With Americans hanging out more at home, many were able to save more on discretionary spending. But this prolonged stressful pandemic can take a heavy emotional toll. It’s important to watch for the emotional triggers that cause you to rush shopping and create a plan to manage those emotions responsibly.

What is emotional expenditure and what triggers it?

While the term retail therapy might sound like a fun pun, buying products can become a real emotional outlet for some spenders. Emotional spending can cause you to spend more than Your budget can last, with repercussions on your wallet.

When you experience an emotional trigger, you may experience a series of reactions that lead you to make a purchase. You might be driven to spend by a range of emotions, but here are a few examples:

  • Sadness. After a bad day, you decide to go shopping to feel better.
  • Boredom. A boring morning at the office makes you splurge on snacks to make the afternoon less stuffy.
  • Fear. A global pandemic is taking hold and you are immediately stocking up on pantry items you don’t want need for a moment.
  • Jealousy. While shopping with friends, they brag about their latest purchases. This leads you to buy an even better model of an item you don’t need.

Think of some examples of emotional expenses in your own life. Personally, I am guilty of emotional expenditure when I am tired or overwhelmed. But each has their own triggers that lead to emotional expenses.

Here’s how to keep emotional spending under control

If you want to get your emotional spending under control, the strategies below can help.

1. Identify your triggers

The best place to start is to identify your triggers. In order to identify your personal triggers, Erin Papworth, financial coach and founder of personal finance app Nav.it, recommends tracking your mood to identify the triggers and emotions that cause you to spend without thinking about your well-being. overall financial.

“Over time, people start to identify habits and trends that correspond to unwanted behavior,” says Papworth. “Self-awareness is the first step in any behavior change. “

With a better understanding of when you are prone to overspending, you can recognize the signs before you complete the transaction.

2. Avoid impulse purchases

Impulse buying can happen at any time. If you hadn’t planned on buying the item until you got to the store, then it’s an impulse buy. These fancy purchases can add up quickly.

To avoid the exhausting cost of impulse buying, take some time to think about your purchase.

“A great way to avoid impulse spending is to have a rule that you should wait at least 24 hours before buying anything above a certain amount, like $ 50 or $ 100,” explains Marlene Schmidt, Money Management Coach at Insight Spending Planners.

The advantage of sleeping on it is that you will have a clear mind when making the decision to purchase.

“A lot of times you’ll change your mind and realize you don’t need it or want it anyway,” she says.

3. Watch out for advertisements

We are bombarded with a variety of advertising media including radio, the Internet, billboards and television. Even your inbox is probably full of retailers advertising their latest sale.

With the persistent barrage of ads, it can be easy to fall into an emotional spending trap. You can avoid this temptation by minimizing your interaction with advertising whenever possible. For example, you can unsubscribe from retailers that regularly send advertisements to your inbox or remove your name from mailing lists.

By removing certain advertisements from your life, you are removing some of the temptations you face as an emotional spender.

4. Find other activities

When trying to refrain from emotional spending, consider what other activities will fill that emotional void. For example, you might choose to meet friends for a free walk in the park instead of shopping at a mall. You’ll still enjoy the catch-up connection without the temptation to bring home whatever is on sale.

5. Make a budget

If you don’t already have a budget, then it’s time to build one.

“Far too many spenders don’t use a budget to set parameters for their habits,” says Nishank Khanna, chief marketing officer of Clarify Capital, a service that provides finance to small businesses. “When you’re not keeping track of your expenses or have no goals in mind, it can be difficult to feel in control of your financial situation. “

With a budget in mind, you’ll have a better idea of ​​what you can afford to spend before letting your emotions take over.

6. Set financial goals

Beyond setting a budget, create financial goals based on your values. Goals for your money can range from funding vacations to building up your retirement accounts. As you tie your emotions to future financial goals, it may be easier for you to delay an immediate emotional purchase.

Cameron Burskey, partner and general manager of pension security at Cornerstone Financial Services, recommends displaying these goals in places you’ll see often, like a phone lock screen or background, or on a bathroom mirror. bath. “There are a lot of places you can put your financial goals because it’s important to constantly remind yourself of them,” he says.

7. Avoid the social media comparison trap

When creating your buying plans, Sabrina Hamilton, creator of Finance Over Fifty, recommends limiting your time on social media.

“Social media can perpetuate the desire to follow the Joneses and can trigger emotional spending,” Hamilton said.

Don’t let social media triggers push you past your comfortable spending levels.

At the end of the line

Emotional spending can be a very real threat to your financial well-being. As you implement these action steps in your life, continue to be aware of the triggers that cause you to overspend.

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