Are you a shopaholic? Going to the mall is one of America’s favorite pastimes, but at what point does it become a problem? Today we will talk about a financial wellness issue that plagues many Americans: emotional spending.
What Is Emotional Spending?
Emotional spending is when you buy something in order to help manage a negative feeling or problem. You do not actually need the purchase, but buying that item can give you positive emotions to temporarily cover negative emotions. This means spending money on unnecessary purchases, making it much more difficult to save or prepare for the future.
When It Becomes a Problem
All of us can be a little guilty of emotional spending, but the point at which it becomes a problem is when you frivolously spend money without growing your savings account, especially if you can’t pay all of your bills. If you aren’t careful, emotional spending can easily cause you to spiral into debt.
Stop Emotional Spending
Identify Your Triggers
What are some triggers that begin your emotional spending? The most common triggers for most people are stress, low self-esteem, and loneliness. Learn your triggers to become more self-aware of how you can stop emotional spending.
Don't Be Fooled by Sales
Just because something is on sale doesn’t mean that buying it is saving you money. You are, after all, still spending money to buy that item. For example, the 4th of July sale going on in stores the week after Independence Day does not mean that you need to buy all the stars and striped decorations in the store.
The mall can be a battleground of temptation for someone who struggles with emotional spending. To help, only plan a couple of times a year to visit, plan out your purchases ahead of time, and leave the credit card at home. You may also need to unsubscribe from mailing lists that cause too much temptation.
Splurge a Little
Stopping emotional spending doesn’t mean you stop treating yourself altogether. Set aside a small portion of your money to a little splurge. You can set it up to be a small splurge each week or a bigger treat for the month. No matter what, though, do not spend more than 5% of your monthly income on an unnecessary purchase.
You deserve to have control over your finances. Are you struggling with emotional spending? Contact Coremoney Coaching to work with a financial wellness coach who can help you overcome your struggles and set yourself up for success.