Have you ever found yourself shopping online not because you really need to purchase something, but to soothe stress or anxiety? Taking just a few simple steps to recognize emotional spending can help make it easier to stick to your budget, reach your financial goals and attain financial security. Here’s how to start.
First, What is Emotional Spending?
At its core, emotional spending means buying something you don’t need – and may not even particularly want – to satisfy an emotional need. That could mean shopping to distract from negative emotions, like stress, sadness or isolation, or even shopping out of boredom.
And research shows it works. A study published in thefound that retail therapy helped reduce sadness and helped shoppers gain a sense of personal control.
But these benefits can be short-lived. At best, you may end up spending your recreational budget on purchases that didn’t truly make you happy. At worst, you could put your financial wellness at risk, and potentially boost your stress levels, if emotional shopping leads you to make purchases you can’t afford.
Understand Your Emotional Spending
Most emotional spending is a pattern of behavior. When you start to recognize the patterns that lead you to spend, you can start to disrupt them.
Use Virtual Wallet® Spending + Budgets tool within your PNC Mobile app1 to review your purchases over the past few months. Look for transactions you remember making because you were experiencing negative emotions, impulse buys you don’t use anymore (and may not even remember making) and purchases that made you feel guilty afterward.
Once you’ve identified an example or two, ask yourself:
- How were you feeling when you made the purchase? Were you bored, stressed, sad, or experiencing another negative emotion?
- What happened before you decided to shop? Had you just received bad news? Was it an impulse add-on to a planned shopping trip?
- How did you feel immediately after? What about after a few days?
Look for patterns in the situations that tend to trigger emotional spending, the items you tend to reach for when you’re feeling emotional, and how those purchases affect you afterward. Write your findings down to create an emotional spending profile to identify likely emotional purchases in the future.
Find Alternatives to Emotional Spending
Once you’ve identified your emotional spending pattern, come up with a plan to disrupt it.
If you tend to make emotional impulse buys when you’re shopping for essentials, for instance, resolving to shop with (and stick to) a list could help keep you on track. If you tend to spend emotionally when you’re bored, come up with a list of alternative activities, like reading a book, calling up a friend or taking a walk around the block.
If you find you’re shopping out of sadness of loneliness, seek out support from loved ones. You don’t need to divulge your concerns about emotional spending, but it might help – after all, they might be struggling with the same thing. Finally, look to your workplace mental health benefits or regional programs to get added support when you need it.
Take an “Out of Sight, Out of Mind” Approach to Advertising
Marketers are well aware of our tendency to spend emotionally, and brands design their advertising to appeal to emotion. What’s more, research shows that advertisingSo in addition to showing us new and shiny things to spend our money on, it may also trigger negative feelings that drive us to spend.
Taking steps to reduce your exposure to ads may make it easier to curb emotional spending. Start by installing an ad blocker extension to your browser to cut out online ads. Consider temporarily unfollowing brands that trigger your emotional spending on social media. Unsubscribe from their emails, too, or filter them into a separate folder to keep them out of your inbox.
Finally, remove your payment information from sites where you tend to spend emotionally, or use a site-blocking browser extension to cut off access to those sites entirely. You’ll have to unblock and re-enter your payment information to make a purchase, giving you more time to change your mind.
Spend Mindfully With Each Purchase
Not every emotional purchase is bad, and you shouldn’t feel guilty for treating yourself within your budget. But spending mindfully should help limit emotional buys to free up more funds for what you truly want.
So before you make a potentially-emotional purchase, weigh the joy you’ll get from the purchase against its cost. The rush from that $7 latte might be worth it, but $50 for a new phone case when you’ve already got a few at home? Maybe not so much.
Come back to reconsider larger purchases 24 or 48 hours later to see if you still really want it. And consider a “one in, one out” rule for purchases like clothing and housewares. If you already have what you need, each new item should be meaningful enough to replace one you already own.
Overall, taking steps to recognize emotional spending will help you take control of your finances, so you feel secure in your finances and satisfied with your budget. And if you need added support we’re here to help. Connect with PNC for help setting and sticking to a budget and reaching your financial goals.