How to Avoid Emotional Spending

Emotional spending can lead to financial distress and throw a wrench into your budget, so it is crucial that you exercise control over your emotions so as to make intelligent money decisions that help reach your long-term financial goals.

Establishing simple barriers can help curb emotional impulse shopping. For example, using cash envelopes or withdrawing credit cards could help curb such spending habits.

Make a list of your wants and needs

Emotional spending occurs when we buy something based on how it makes us feel, often due to stress, anxiety, sadness or grief. But it may also occur if we reward ourselves or get bored easily.

Although shopping based on emotions may seem harmless at first, it can quickly spiral out of control once your budget starts being breached. Debt, prevent you from saving money and make reaching financial goals more challenging.

One way to prevent emotional spending is by compiling a list of wants and needs. This will allow you to identify which items may trigger impulse buys. Furthermore, consider setting aside some time between major purchases so that you have time to think over whether the purchase really matches up with what you need; you may also consider blocking websites that you use often when shopping emotionally, or installing browser extensions to block sites altogether.

Make it a challenge to make unplanned purchases

Emotional shopping can be detrimental to achieving financial goals, so if it is something that happens regularly to you it might be helpful to identify what triggers these impulse purchases so that you can find more efficient ways of controlling those feelings.

For instance, if you find yourself shopping when feeling anxious or stressed out, try replacing this behavior with more productive alternatives such as walking or reading a book instead. Discovering healthier ways of processing emotions will ultimately help curb emotional spending and save more money in the long run.

Make spending difficult by opting for cash rather than credit cards, and designating certain bank accounts as "home down payment" and "vacation fund." Additionally, use apps or virtual financial advisors like YNAB, Goodbudget, Mint or PocketGuard to monitor spending or provide personalized guidance on what purchases to make (like YNAB, Goodbudget Mint or PocketGuard). Delaying purchases until 24 hours have proven particularly successful for decreasing emotional purchases as those items lose their novelty quickly once purchased.

Take a break

When you find yourself in an impulse buying mode, try to put an end to it before pulling out your wallet. This may involve returning an item back into its place of purchase or, online, removing it from your cart. Wait 24 or 48 hours before making a decision so you can assess if your desire for purchasing has subsided.

Emotional spending can become an ongoing problem if it contributes to debt or otherwise alters your budget. By taking steps to curb emotional spending, you can become more in control of your finances and reach your financial goals faster.

Once you understand the triggers for emotional spending, you can develop effective ways of managing stress and sadness without resorting to overspending. Instead of purchasing comfort food as an immediate fix, try going for a walk or calling friends instead; both activities tend to have greater positive impacts than spending money directly.

Seek help from a financial advisor

Emotional spending is an all too familiar problem that can have devastating repercussions for your finances, from debt accumulation and reduced savings, to reduced credit scores.

As much as it's natural to experience negative emotions, finding cheaper ways to address those feelings could be better than spending your hard-earned cash in stores. Instead of shopping when feeling sad, perhaps calling a friend or going for a walk would suffice - both can provide comfort without breaking the bank!

If emotional spending is becoming an issue, consulting with a financial advisor could be invaluable. They can help create barriers to prevent overspending such as freezing credit cards or uninstalling shopping apps from your phone. Introspection may also help uncover what triggers it so you can address its root causes.

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