Emotional spending can affect all of us

5 min | 4 October 2021

Chanté Joseph

Are you self-soothing post-break-up with online shopping? Does a bad week at the office cause you to buy up your wishlist to feel better? You may be emotional spending.

During lockdown, ordering obscure items online provided me with two things: a drop of dopamine and a brief, socially-distant human encounter with someone I didn’t live with - the delivery man. His kind eyes stared at me worriedly while I lovingly hugged my nondescript package of the day, watching him make the rest of his deliveries like a Santa Claus for adults. Of course, this cycle of ordering goods just to feel something predates the pandemic, but things have felt particularly bad for the last year or so. The £2.4 billion of unreturned goods1 bought online in 2020, according to InPost, is somehow both a shocking and believable number.

The desire to buy stuff out of boredom, heartbreak or joy is called emotional spending. Emotional triggers could lead to erratic and impulsive buying decisions that you later regret. Emotional spending can happen to anyone and could even affect your ability to be financially secure.

There is a lot of shame and guilt attached to money mismanagement; the belief that only lazy and undisciplined people are bad with money. However, your physical and mental health are connected, and can directly affect your ability to think clearly, and sensibly use your money. We like to think we make financial choices logically, but most of us are making our choices based on unconscious drivers.

The main issue with emotional spending is not necessarily that it leaves you out of pocket - perhaps you can afford to buy things you don't really need - but that you are no longer in control of your finances; your emotions are. This kind of spending is worrying, as although emotions are fleeting, the impulsive action of buying can become self-destructive and regretful, which lasts much longer. Your spending can land you in debt, impact relationships you care about and affect your anxiety levels.

So how do you curb emotional spending?

You must first be kind to, and honest with, yourself.

Admit it: you can get a bit too trigger-happy on the checkout button when you’re not feeling great. That’s OK - it’s what you do next that counts. You cannot hate yourself into spending better; figure out what triggers you to spend and work through those emotions in healthier ways. Do you get anxious before certain events? Do you feel pressure to spend to keep up with friends? Maybe when you feel lonely or bored, you spend to unlock features on dating apps.

Whatever it is, spot it so you can work out how to stop it.

Sometimes we have to step back to move forward; this means taking a deep breath and bravely facing a sight far more terrifying than your worst nightmare: your bank statements. Don't just look at the big purchases - seek out the unnecessary buys and ask yourself:

  • How am I feeling right now and how did I feel when I bought this?
  • Was this purchase a result of an emotional trigger?
  • Was it something I really needed at the time and am I still using it?

Next, when you’re faced with an emotional trigger, use some circuit breakers. Let’s say you’re overwhelmed with work and want to buy that new kitchen appliance to feel better. Ask yourself:

  • Will I use this once to make an unsatisfactory meal and then leave to gather dust under a cupboard somewhere?
  • Does this work within my budget for the month?
  • Can I see how I feel about this in a few weeks?

If you feel uncertain, abandon it. But, if you’re still on the fence, leave it in your basket for a week or so and see if you still want it.

Lastly, budgeting is your friend. To curb your emotional spending, you have to plan for it. It may be unrealistic to go cold turkey, so set yourself a reasonable limit that you swear you won’t go over.

You can do this by having an emotional spending pot that you refill every month, popping your credit cards in ice or carrying a set amount of cash with you for the day.

It can sometimes be difficult to hold ourselves to a task, so ask a close friend or relative to keep you accountable. If you don’t spend your allocated budget for emotional spending that month, you can park the rest away in your savings, and voila, you win!

It is essential to understand that your spending patterns don’t always reflect how ‘good’ or ‘bad’ you are with money. It is much less binary than that and far more psychological. When identifying your triggers, be easy with yourself and introduce incremental changes to help. You won’t always be beholden to the whims of your emotions when spending if you make an effort not to be.

Sources:

  • inpost.co.uk Press release "Lockdown Logjam: UK shoppers sitting on £2.4 billion of unreturned goods bought online"
  • forbes.com Article dated 25th February 2019  "The Psychology of Money: What You Need To Know To Have A (Relatively) Fearless Financial Life"
  • mentalhealth.org.uk Article dated 9th July 2021 "Physical health and mental health"
  • inc.com Article dated 26 March 2018 "Harvard Professor Says 95% of Purchasing Decisions Are Subconscious"

The new way to bank

Get to know the Chase current account. It's packed full of rewards and clever features that we think you'll love.

Explore the account