71: Emotional Spending → 5 Tips to Control Impulse Spending
Emotional Spending
Emotional spending is exactly what it sounds like: spending money on things, food, or experiences based on an emotion. In this blog post, I'll cover common emotional spending triggers, how emotional spending might show up for you, and ways to cope with emotional spending.
What's the difference between Emotional Spending and financial Self-care?
Just because spending is emotional doesn't mean it's bad. Healthy and thoughtful spending can be a part of your financial self-care plan. And, let's be honest, most spending is a bit emotional. It'd be such a bummer if you didn't feel excited about that new couch you saved for that you could finally afford! Or to expect you don't feel anything when you sign a lease for your first solo apartment after being partnered for years.
Emotional Spending Triggers
Many things could be considered emotional spending triggers. While it varies from person to person, common responses I hear in financial therapy are people buying things when depressed, stressed out, bored, and even when they are happy or celebratory. In my book, The Financial Anxiety Solution, I talk about getting comfortable listening to the cues your mind and body are sending you when it comes to spending money.
Common Types of Emotional Spending
Impulsive Spending Sometimes called retail therapy, it is shopping or spending to improve a person's mood. These are unplanned purchases, usually, that happens in the moment. Think: that chocolate bar in the checkout line at your local grocer or the cute pair of earrings from an Instagram ad.
Spending when in a low mood There’s actually some science that shows not all spending when you are in a low mood is bad.
Spending when in a good mood This looks like riding the wave of a good mood in conjunction with swiping a card.
Spending when bored or indifferent Need something to do? Book that Airbnb, buy that pair of shoes, order Postmates.
Aspirational Spending "I'll feel better if I have X" or "I'll start doing this habit when I have this product."
Feeling stuck financially. For folks who have debt or are living paycheck to paycheck, they may think, "I'll never get out of debt, so what's the use in trying?" This thought can go along with shopping or spending.
Chronic gift giver Feeling like you have to buy things when you see things that remind you of someone.
How to Control Impulse spending
If you've already spent and are looking at what to do immediately after an emotional spending spree I recommend returning physical products if possible. If not, like you splurged on a big meal or bought something on final sale, spend a moment reflecting on what might have triggered that spending, and work on forgiving yourself. Here are tips to help prevent emotional or impulse spending moving forward.
48-hour rule If you are tempted to spend on something, put it in your virtual shopping cart for 48 hours. If you still want that item, and can safely afford it, go ahead and purchase it. I use these three questions when I’m considering an unplanned purchase, “Do I have money to pay in full for this? If I buy this, am I taking money away from another financial goal of mine? Will I regret this in an hour/tomorrow?:
Annual or quarterly "splurge" lists Every year on or around my birthday, I create a google doc where I jot down all the things I’d love to purchase that year. Examples of items that have been on that list include upgrading an everyday purse, a fall/spring jacket, and a new blazer. I reference that list when I see something that catches my eye. If it’s on the list, I happily purchase it! If not, I apply the 48-hour rule to it.
Plan for celebratory spending There is nothing better than ordering that extra-large slice of triple chocolate cake to celebrate a promotion (just me?). However, planning ahead for that spend can make it all the more tasty (see what I did there?). Plan for promotions, bonuses, or windfalls by creating financial guidelines. E.g. 10% can be spent on fun, the other 90% goes toward
Put a rule on your credit or debit card Create a limit on your card that texts you when you are getting close to your daily or monthly spending limit.
Block ads and trackers. You've heard it before, but it's worth unsubscribing from those email lists from your favorite stores, disabling caches and cookies from shopping sites, and selecting "Do not allow app to track" when you are using any phone apps. The algorithms built to get you to spend your hard-earned money are not only everywhere; they are wicked smart. (Hence, my Instagram ads are often full of dog toy box subscriptions and comfy slippers and PJ recommendations). On Gmail, you can easily unsubscribe from email listservs with the click of a button. Ensure your apps are turned "off" on your phone to prevent tracking, and regularly clear out your browser history.
When is Emotional Spending a Problem?
Emotional spending is problematic when it becomes the go-to coping skill of a person, a person feels like they are unable to stop their spending, they feel "out of control," when shopping, or when their "retail therapy" is putting them in financial harm's way such as putting things on credit cards they can't pay off in full or taking out loans to support a shopping habit. Suppose that becomes the case for you or someone you care about. Besides the cutesy moniker, "retail therapy" isn't a substitute for therapy from a licensed clinician. In that case, it may be time to consider psychotherapy to help dig deeper into emotional spending triggers, learning healthy coping skills, and finding ways to stay out of financial hardship due to overspending.
Understanding Emotional Spending
Emotional spending is a normal phenomenon that happens to people. The takeaways are to look into the underlying cause of your personal reason for emotional spending, implement tips to help control emotional spending, and practice patience as you learn new ways to cope with uncomfortable feelings that don't involve spending money.
Spending Intentionally
It's normal to have fears about spending money, especially given the noise in personal finance education that shames people for spending. By spending intentionally, you can learn how to enjoy spending money on the things that bring you joy. As I've shared today, it can be important to assess if it's normal worries about spending money or if it's something more serious like financial anxiety. Giving yourself a saving and spending plan can make it easier to feel confident about safely spending money. Finally, try out a few different ways to spend your money and see which method feels best for you.
If you are in need of more guidance on spending intentionally, my step-by-step workbook, The Financial Anxiety Solution, can help you stop worrying about money, take control of your finances, and live a shame-free life!
The Financial Anxiety Solution is available via Amazon or your retailer of choice! Available in both digital and paperback format.
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What is emotional spending? And how is emotional spending different than something like retail therapy? And what's the difference between emotional spending and treating yourself or financial self care? In today's podcast episode, I'll be covering what emotional spending is, some common emotional spending triggers I see come up in my work as a financial therapist, some tips that you can use to start implementing if you struggled with impulse spending or emotional spending, and we'll cover a little bit about when emotional spending tips into a problem that you should seek out treatment for--whether that treatment is psychotherapy, or something else. And I'm really keeping my fingers crossed that this episode goes smoothly, I recorded the intro three or four times at this point, because they are doing construction across the road. And every time I hit record, there's like a literal dump truck backing out and making all sorts of awful noise. So anyway, let's get into it.
All right. First things first, emotional spending is exactly what it sounds like. There's no plot twist here. Emotional spending is spending money on things, food, experiences, based on an emotion. And in today's podcast, I will cover what exactly that means and whether or not it's a good thing or a bad thing. If you've been here a minute, you probably know that just because something is emotional, doesn't mean it's bad. We are allowed to have feelings. And healthy and thoughtful spending can be a part of your financial self care plan. And even when you have, like a good rush of energy when you're spending, that's okay. Like, let me think about something recently. Like, let's say, you had saved up for a new couch, and you finally could afford the couch that you'd been eyeing, and you entered all of your information in the checkout and hit Buy or Ship or whatever, it'd be such a bummer if you didn't feel like a moment of pride or excitement or joy there. That I guess is technically emotional spending, but it's not a bad thing. It also be appropriate that you feel something in your body. When you sign a lease for your first solo apartment. After being partnered for years and years, right. We experience emotions when it comes to money and to try and numb out all of our emotions is not the goal when we are working with our relationship to money. So with that said, let's let's talk about some common types of emotional spending triggers. I think we're pretty familiar with the term trigger right now. It's basically some sort of antecedent, some sort of cue or clue or signal that you see or hear or experience that triggers a response in your body. So for example, if I could smell you know, Apple Cinnamon in my house, it might be a trigger that maybe I'm having Dutch baby pancakes, like that's a very clear type of trigger.
So when it comes to our relationship with money and emotional spending triggers, some of the most common reasons I hear and financial therapy that are, are related to emotional spending triggers are buying things when experiencing a mental illness such as really symptomatic depression or intense anxiety, maybe being in a manic episode if you have bipolar illness. So those are some very real reasons that a person might spend. And then outside of mental illness, I hear a lot that people spend when they're stressed out when they are bored--hello, pandemic month, kazillion, and one. And we also spend when we're happy or celebrating something. In my book, The Financial Anxiety Solution, I talk about getting comfortable listening to the cues that your mind and body are sending to you when it comes to spending money. So as we get into some common types of emotional spending, I want to differentiate a specific type of emotional spending that I hear people use interchangeably with emotional spending. So people will say, retail therapy or I also hear it called impulsive spending. And essentially what reason teletherapy is or impulsive spending is, is shopping or spending unplanned money to specifically improve a person's mood. And oftentimes, these are the things that happen in the moment, it could be something super small like grabbing a dark chocolate bar at the checkout line at your local grocer that you weren't planning on spending on and you get that little hit of dopamine when you add that beautiful artisan dark chocolate bar to the little conveyor belt, or it could be something bigger. Like being in like an outdoor, I keep thinking of outdoor things, because obviously that's a sign of the times right now, but like at an outdoor artists in market, and just literally going booth to booth to booth and buying earrings and an art print and an apron and some like, you know, cutting boards, you know, I'm just thinking of all the things that are at my local artists in markets or creators market, right, and the that type of spending done to help improve a person's mood and a person's mood, like I mentioned earlier, it could be boredom, it could be they're in a good mood, it could be that they've got nothing else to do. There are a lot of reasons that we do this. And there are very real reasons that we get that hit of excitement. And I think a lot of people water it down and say it's just about this dopamine hit, it's just about this rush. But it's also about control. I was on NPR marketplace. Yes (laugh), shout out to me, a few months ago, talking about this concept of revenge spending or spending up money that you weren't able to spend during the peak of the pandemic and why we do that. And my response to the reporter was that, look, we have so little control in our lives. Anyway, add on to that a global pandemic and we have very little control over what's happening outside of our household. And shopping is something that is a very controlled experience. For example, I could go to the local, you know, fitness apparel store, why can't I think of words, clearly, I haven't been shopping for fun in a minute. But I could go to the local like fitness store is that where you buy like leggings and stuff. I'll think of it in a second--athleisure, athleisure! Right, that's the word. I'm here laughing to myself by myself, thank you to the five people out there listening. Anyway, I could go buy myself some new clothes. And when I walk into the store, if it's a store I'm familiar with: One, there's going to be so much familiarity, I know how the lighting will be set up, if it is a chain store. I know the type of music that will be played. In some stores, they have the same scent, like the literal perfume or air freshener or candles that they burn are all the same, you'll often be greeted in a similar manner, when you go in, you'll be offered help in a certain way, when you go to try things on. It's very familiar, it's very comforting to have something that is similar and familiar during times of distress. And the actual act of shopping is also something that feels very much in our control. You grab a handful of clothing items, you walk back to try them on, you put them on, you grab the ones that fit you or that make you feel good, you wait in line, you bring them to the cash register, and boom, there is your exchange, when you spend the money, you know what will happen is that your items will be bagged up, you'll be told, thanks so much. Have a great day, how you go with the clothing that you didn't have before that you have now. It is a very controlled, predictable experience. And it makes so much sense why right now, we might be engaging in a little bit more of that behavior. So yes, it's about the dopamine hit when you actually purchase the item. But it's also about this familiarity and sense of control. So other types of common emotional spending that I see in my practice, and let's be honest, I'm a human. So I've also experienced these things. Spending money when you're in a bad mood or a low mood, spending money when you're in a good mood. Spending money when you're bored or indifferent, aspirational spending, this is the spending where you say I'll start doing X when I have this product, right. I'll start baking more sourdough bread when I have my new scale that measures things in tenth of a gram instead of a half of a gram. Clearly, I've been spending money on my sourdough still I am that person, or I'll start sleeping better when I have this new fan in my room, right, these kind of aspirational things. Now, let's differentiate that with the self care spending that I mentioned earlier. If you are like, I am so hot and so uncomfortable at night sleep is super important to me, I can't ever get my temperature regulated, then yes, purchasing that pair of cooling sheets are that fan is going to be in alignment with your financial self care. But if you have terrible sleep hygiene, buying, that fan isn't going to do anything. If you're still up until three in the morning watching your shows, you know, drinking caffeine up until right before you go to bed buying that fan isn't going to do anything to go. And I'm saying like that's the aspirational spending, I'll start drastically changing my life when I have this new product in my life, right? Other types of emotional spending, feeling stuck financially, meaning I'm never going to get out of this credit card debt. So what's the use and trying I might as well just buy this thing, right this feeling of being so underwater that it doesn't matter whether you save or invest or don't buy the thing, it's just going to add--it's just drop in the bucket. So just kind of giving into it.
And the other type of emotional spending is hard to define. But it's essentially like my chronic gift givers. This is different than like showing up to a person's home with like a bouquet of home picked flowers, right? This is about saying, I'm out and about. I'm at this souvenir shop and I load up my shopping basket with things for the neighbor that I waive at twice a year or you know, my second cousin who had their fourth baby, like all of these types of things where you feel like you have to buy things for these people, when in reality, like you're just buying them because you get a kick out of it. And if you are a chronic gift giver, and gift giving is your love language, I love taking pictures of items and sending a little message off. So like, literally if I'm out and about and I see a funny t-shirt or like beautiful stationery that reminds me of one of my friends, I'll snap a picture and text them in the moment and be like, Oh my gosh, I was in you know, New Orleans, or I was in Denver, and this thing made me think of you. Because that's often what we're trying to do with gift giving is let the person know, this particular thing reminded me of you it made me feel good or reminded me of the type of person you are or this inside joke, right? And the likely get a lot more out of it than that T-shirt that says, you know, My friend went to Disney World and all I got was this t shirt; like that's gonna end up in the rag pile in a few months. So don't contribute to fashion waste. Alright, so those are the common types of emotional spending, impulsive spending, spending window, low mood, spending when in a good mood, spending when bored or different aspirational spending, feeling stuck financially, or being kind of a chronic gift giver and purchasing things out of guilt or like being beholden to this idea that you have to buy a gift or buy a gift for somebody.
So what do we do with this? Look, it's normal. As I mentioned, I've probably spent in all of those scenarios, or in most of those scenarios, it's human, I would hope that we feel something when we're spending a substantial or not even a super substantial amount of money. But if you are emotionally spending or impulsively spending, and you are trying to figure out what to do to prevent it from happening again, I have a lot of ideas for you here. One of my favorite things that I recommend to so many of my clients is the 48 hour rule. And you've probably heard of this. It's literally saying, oh, I want that cute jean jacket. It's Monday, I have to wait till Wednesday, if I still want to on Wednesday, I can buy it. And that's like a fine enough rule. I like to amp it up by making an annual or even a quarterly if you're a big shopping person, Splurge or want lists. And what I mean by this is on your birthday, which is what I like to do, I tend to make goals around my birthday instead of the new year. But if you're new here and your birthday is like a ways away, just just pick a random day. You could say, hey, October 1 is coming up. I'm going to make this list anyway. annually or quarterly. I want you to write down a list of items, experiences, things, restaurants, all of these things like Oh, I really want to buy that thing or have that experience this year. That's the key this year. So for example, I might do inventory of my closet and go, You know what I really could use? Another stripe t shirt. That's a joke. If you've seen my closet, I like only own striped t shirts. But let's say I was in dire need of replacing a, take it everywhere striped t shirt, I'm really living on the fashion edge these days. What I would do is I would write down on there, you know, crewneck striped tee, and that would be on my list. Same thing like for a bigger like investment piece, a new pair of Doc Martens or a nice spring coat. Those are the types of like things that are on your list that you've been meaning to add to your wardrobe. Or maybe you're big into skincare and you're like I really could go for a beautiful caffeinated under eye cream, right? Whatever your deal is write down the things that like I really want to invest in this particular thing. Same goes for like a new restaurant in the area. If you're like, Ooh, I heard this like bougie new restaurant opened up I really want to give it a go write that down. So how we couple this splurge list or want list or fill in the blank, your name list, so mine might be called like Lindsay's 2021 Wish List, whatever you want to call it, add that to your 48 Hour Rule. Right? So Oh, I see that beautiful pair of Doc Martens that I really want. Is that on my splurge list if yes, and I have the money, cool, go buy those boots. If it is not on your splurge list, then it automatically gets the 48 hour rule. From there, then you have to, I wish I could do one of those, like, choose your own adventure graphics, I don't know what those are called in real life. But from there, you put this item kind of into this 48 Hour Rule purgatory, and I want you to ask yourself these three questions. And these three questions again, come from my book, The Financial Anxiety Solution. Question one: Do I have the money to pay in full for this? If yes, you move on to question number two: If I buy this, am I taking away money from another financial goal of mine? If the answer is no, and you can pay in full for it, and it's not going to prevent you from reaching another financial goal of yours, then you get to ask yourself, will I regret this in an hour or tomorrow? So again, we're really taking away that instant release of dopamine by cooling it off, right? So make your wish list. If it's not on your list, let it cool off for a little bit. And if you're still really wanting it, ask yourself those three questions. So that's kind of the first big thing that I invite you to do. And if you're like, I can't remember that, again, just grab my book, it's all my book. Then the other thing is to plan for celebratory spending. I talked about this in my blog post on lifestyle creep or lifestyle inflation. And allow yourself a plan for the types. When you have something that you want to celebrate, you want to celebrate by going out to a beautiful meal, you want to celebrate by upgrading, you know, some decor in your home when you get a new job or a promotion or land that big client. So what I want you to do is create some sort of guideline for every time you get those "windfalls" right, landing a new client getting a promotion, getting a raise, etc. You say, for every time that happens, X percent, I can spend how I want and then x percent automatically goes into saving or investing, right. And that way, you can say, Cool, I have this $1,000 Bonus, I'm allowed to take 10% of it and do whatever I want. With that, I'm gonna take that $100 and go buy myself something really nice and not think twice about it, that other $900 is going to be split between my emergency fund and my investment account. Cool? So you can celebrate and have fun without having that like emotional spending regret hangover the next day. Another thing you can do moving forward to prevent yourself from falling into emotional spending is to put a rule on your credit or debit card like a limit where it will ping you or it won't go through. So if you have a really hard time, kind of getting into these spending sprees, then maybe set you know a $300 limit where you can't spend over $300 in a day and of course you can set that number but you can set that up with your bank, or credit union when it comes to your credit card or debit card, okay? Another thing is that the robots and the algorithms are all over the place. So you want to actually have technology work in your favor by not allowing the robots to track you. So what I want you to do on your phone, and or when you are browsing websites, don't allow them to put cookies on your website say no, you like when you download a new app, more often than not what will pop up is an option that says, either A) Do not allow app to track my actions I think is what it says or B) Allow app to track my actions. You want to say no. You also want to unsubscribe from those email lists from your favorite stores, disable cookies and clear your cache from your internet browsers, right? Because these algorithms are built to get you to spend your hard earned money and not only are they everywhere, they are so smart. Hence every time I go into Instagram, it's all about dog toy box subscriptions for my dog Birdie and comfy slippers and PJ recommendations because I'm working from home indefinitely, okay. When it comes to unsubscribing from those email lists on Gmail, you can easily unsubscribe from email lists serves like at the top of the email. Now you don't have to scroll down, click expand, click on subscribe. Gmail has made it really easy for you to like, be done with that stuff. So again, give yourself an annual or quarterly wish list. Plan for celebratory spending. Ask yourself some reflective questions before you purchase things. Put a rule on your credit or debit card that limits the amount you can spend in one day and block ads and trackers now. That's helpful for like here on out.
But what if you've already spent and you're feeling the pain of you know, the the emotional spending spree hangover first, if you can return anything, items, return them, return them, return them, return them. And if you can't, then I want you to move on to step two, which is forgiveness, you're human. This happens. It doesn't define you. It doesn't mean you're a bad person, it doesn't mean you're bad with money, it means you're a human. So get comfortable saying "I made a mistake. It's not the end of the world," okay. But if you can return those things, return them, forgive yourself, and then journal it! What was going on that had you that triggered you into spending money you didn't want to spend or you regretted spending? Now, when does emotional spending or retail therapy tip into the world of being a problem? In my opinion, it becomes problematic when it becomes one of your go to coping skills, in other words, is that the only thing you know how to do when you're feeling uncomfortable? Is your first urge to open up your laptop and start shopping? Is your first urge to drive to a mall and get out your credit card? Think about what is going on. And if you don't have a broad array of coping skills or tools available, available at your disposal, I would start kind of you know getting into some other options for coping with stress. That could be meditation, it could be movement, it could be watching a silly movie, it could be cooking, it could be baking, it could be a myriad of things. But if your go to coping skill is shopping, I would urge you to just kind of check in with that spending. Another kind of red flag for me when emotional spending is becoming problematic is if you feel like you can't stop spending if it feels more like it's out of your control. You're like in your head I know I shouldn't do this but you can kind of like have that out of body experience where you see yourself and during your credit card into those wesites. Wow. Those are called websites--to websites or you can like almost have an out of body experience when you're you're at the mall and you're just like loading up on things or feels out of control. So it feels you can't stop the spending or the spending feels out of control. That's usually a red flag. Another red flag is if your retail therapy or emotional spending is putting you in financial harm's way. If you are constantly saying oh this is my self care, this is my treat this is whatever but the financial self care of like buying that little treat whatever that means for you. Means you're putting it on a on a credit card that you're not paying off in full or you're taking out loans to support this habit, it is no longer financial self care, it is no longer a treat is going to harm you in the long run. So those are some big red flags for you. If it's your only coping skill if you can't stop spending, or the spending feels out of control, when your spending is putting you in financial harm's way, like you're putting things on cards, you're not paying off in full or you're taking out loans to support a shopping habit. If that's the case, I highly encourage you to consider some psychotherapy to dig deeper into those emotional spending triggers, learn some new healthy coping skills and find ways to stay out of financial hardship due to overspending.
So, to recap, if you feel things when you shop or when you spend, welcome to the world of being human emotional spending is a normal thing that happens to people I want you to first check in with why you're spending. If it feels good for you, great, just make sure that's not your only coping skill. Make sure you can afford it, I gave you a laundry list of things to do in terms of implementing tips that will help you control that emotional spending. Practice patience as you learn new ways to cope with feeling uncomfortable; if maybe emotional spending has been your go to coping skill and you're trying something else out.
But I hope these tips help you. And again, throughout today's episode, I mentioned my book The Financial Anxiety Solution, I would encourage you to grab a copy and I highly recommend grabbing a copy from your local community bookstore. It's distributed by Simon and Schuster. So you can call them up or email them and ask them to order you a copy. That way the money is staying in your community. You're supporting local bookstores and you're not supporting somebody who's a multi multi billionaire. We want to keep our money in our communities. So anyway, that's my little soapbox for today. Let me know what you thought about this episode. What did you learn? What was helpful? Any big takeaways! Screenshot this tag me out on Instagram stories and I'll see you right here next week.
Transcribed by https://otter.ai