Emotional spending is a problem many face, but few talk about. This cycle can leave you stuck with debt and prevent you from growing your savings. So, if you find yourself reaching for your cards as soon as you feel uneasy, it might be time to reflect on your impulse purchases.

The more you know, the better you can protect your finances! Keep reading to learn about the psychology of emotional spending and how to manage the habit.

What Is Emotional Spending?

Emotional spending is the behaviour of spending money whenever you feel big emotions, such as anxiety, stress or sadness. It is usually a way of self-soothing or treating yourself after a tough day.

While buying yourself a little present when you feel down is not a bad thing, it can become a problem if you start spending more than you can afford or relying on emotional purchases rather than working through the emotions on your own.

Experts theorise that emotional spending stems from the need to feel in control when faced with problems or significant emotions. But negative feelings do not alone lead to overspending. Emotional spending also includes overspending when celebrating special occasions.

Signs You Might Be Emotional Spending

Are you worried about your emotions and money? Here are some signs that you might need to readdress your spending habits.

  • Spending money feels better in stressful situations, but you regret the purchases afterwards.
  • You bought lots of things you do not need, and now they are sitting unused.
  • You find yourself spending without reason.
  • You are building up debt or are unable to pay off existing debts.
  • You have trouble building up savings.
  • You started spending money set aside for groceries, bills and utilities.

Don’t worry if you relate to these signs of emotional spending. Facing these feelings and changing the behaviour is easy with the right tools and support.

How To Stop Emotional Spending

If you have realised you are making emotional purchases that are affecting your personal finances, it might be time to address the behaviour. Here are some tools you can use to improve your financial health:

  • Create a budget - Many people resort to emotional spending when they don’t have a budget, as they have no limit in their minds. Using a budget makes you aware of how much you should spend, and you become more mindful of non-essential purchases. Learn how to save money and budget online here.
  • Make spending more difficult - Removing your credit cards from your wallet, deleting cards from your phone and using cash when spending makes it more difficult to make excess purchases. You could even rename your bank accounts with motivational phrases to put you off impulse purchases.
  • Address your emotions - Now for the hard part: To stop emotional spending, you might need to find new ways to cope with your feelings. This could be through mindfulness, exercise, talking to loved ones or therapy.

Emotional Spending - The Outlook

Realising you are overspending to soothe your emotions might come as a shock. But understanding your behaviour is the first step to having a more positive relationship with money. When in doubt, learning more about the subject and personal finances can help you confidently navigate the problem.

Read more about money management via the Cash ASAP blog today.