How to Combat Emotional Overspending

By Erin El Issa | Contributor // US News

Older woman shopping in store

“Retail therapy” is a euphemism for a common coping mechanism – spending money as a way to soothe strong emotions, whether negative (sadness, stress, anxiety) or positive (happiness, excitement). According to a new NerdWallet survey, 49 percent of Americans say that they have spent more than they can reasonably afford because of such emotions as stress, excitement or sadness.

I’m not afraid to admit that I’m among that 49 percent of Americans – and among the 67 percent of millennials – who cop to emotional overspending.

Our rational mind knows that simply spending money isn’t going to cure what ails us. But emotion and reason aren’t known for going hand in hand. So here’s a look at the emotions that most commonly cause Americans to overspend and some tips for keeping our budgets in check, no matter our emotional state.

Emotions most likely to trigger overspending:

Stress. Among those who say they have overspent out of emotion, 29 percent say stress was the most common trigger. This is truer for women (35 percent) than for men (24 percent) and truer for those making less than $50,000 (34 percent) than for those making $100,000 or more (24 percent). Among people’s reasons for overspending under stress: thinking that a particular item will make them happier, a belief that a purchase will at least prevent additional stress or the hope that a vacation or expensive leisure activity will provide an escape from stress.

Excitement. Of those who acknowledge emotional overspending, 22 percent say they’re most likely to overspend due to excitement. This is truer for men (26 percent) than for women (18 percent). People might overspend because they want to celebrate, or their excitement may stem from anticipating the purchase itself, such as buying a newly released product.

Sadness. About one in eight Americans who emotionally overspend say they are most likely to do so when sad. They might think that buying something or having something new will make them happier, even temporarily.

How to stay on budget while still having emotions:

As one who has overspent out of emotion and regretted it, I know how challenging it can be to keep your spending in check when stressed out, excited or sad. Here are five ways I’ve found to keep myself from breaking my budget when I’m feeling all the feelings.

Make room for impulsiveness. If there’s no flexibility in your budget for impulse purchases, you’re setting yourself up for failure. I keep a buffer in my budget for unexpected nonnecessities. These aren’t emergency purchases, but they feel like it at the time, so it’s important to prepare accordingly.

Start a 30-day list. The 30-day list is my favorite way to combat impulse spending. Here’s how it works: When I want to buy something I don’t necessarily need, I add it to a list or Pinterest board. After 30 days, if I still want the item and have the money to pay for it, I get it. If not, I delete it from my list, and I’m grateful that I don’t have to deal with the buyer’s remorse.

Unsubscribe. Unsubscribing from sales emails may be an obvious tip, but it’s definitely important. The last thing I need when I’m fighting the urge to overspend is coupon codes delivered right to my inbox. Sales will come around again when I need something, so I unsubscribe in the meantime.

Find cheap or free alternatives. For me, this means checking out books from the library instead of buying them new, or opting to skip drinks at a restaurant and picking up something reasonably priced from the store on the way home. Look for opportunities to rent or borrow instead of buying things you don’t need, and find deep discounts on the things you can’t rent or borrow. Remember, don’t take money you save and just spend it elsewhere. The goal is to avoid overspending, not to change what you overspend on.

Know the return policies. If all else fails, and sometimes it does, I make sure I shop at stores with good return policies. I also keep all tags and packaging in case I decide I don’t want or can’t afford the item I purchased while undergoing retail therapy.

If you feel that your overspending is compulsive or addictive, you may want to seek professional help. Look up your local Debtors Anonymous group or seek therapy on your own. If your overspending is caused by something deeper than emotional whims, tips and tricks will likely not be enough to help you combat it.

Emotions aren’t bad, and you don’t need to fear them for the sake of your budget. Use the strategies above to stay on a good financial track, no matter how you’re feeling. And accept that sometimes your emotions may get the better of you. Gaining control over your finances is a lifelong process, and you’re allowed to make mistakes along the way

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