If you’ve ever impulsively grabbed a sweet treat on an especially bad day (or a great one, for that matter), then you know how easy it is for the way you feel to influence your purchasing decisions.
It’s normal for emotions to come into play when we spend money, said Lindsey Konchar, a licensed social worker and certified financial coach in Minneapolis, whether you’re paying your mortgage, picking up the check for dinner with friends or clicking “Add to cart” from your couch.
The key, Konchar said, is noticing when feelings-driven spending is starting to take a toll on your finances.
Below, experts explain why your mood might sway your spending habits, how to know when it’s a problem and what you can do to get back in the driver’s seat.
What emotional spending is, and why we do it
“Emotional spending is spending in order to maintain or change one’s mood,” said Kathleen Vohs, a professor of marketing at the University of Minnesota and a researcher specializing in the psychology of money.
While researchers used to think that certain emotions led to more spending, they now understand that impulsive spending is typically driven by an emotion-regulation goal — whether that’s feeling better or keeping a good mood going — even if a person is not consciously aware of it, Vohs said. Often, people are most likely looking for a boost of dopamine, Konchar said, a feel-good chemical in the brain.
For instance, the classic example of buying yourself a treat to counteract a bad mood is driven by a combination of wanting to feel better and not wanting to rein in your self-control, Vohs said.
While we often associate retail therapy with feeling sad, this type of reactive spending can be driven by any emotion. “The ones that I’ve seen people really struggle with are feelings of boredom or loneliness,” said Haylie Castillo, licensed social worker and certified financial therapist in Seattle. Just think of all the mindless scrolling from your couch that’s ended in a purchase.
Boredom shopping can be particularly dangerous because of how effective it is, Vohs said. Shopping — in a store or on your phone — provides a level of engagement and stimulation, which is exactly what you’re lacking when you’re bored.
Even positive emotions can contribute to overspending for some, such as the impulse to buy a whole new wardrobe for an upcoming vacation or to splurge on something expensive when celebrating. When we’re in a positive mood, we don’t want to ruin it with self-control, Vohs said, and the physiological arousal we get from making a purchase can help prolong the positive vibes.
“I think people don’t recognize how excitement and a good mood can throw you off your budget very quickly without really meaning to,” said Aja Evans, a New York-based licensed mental health counselor and financial therapist, and author of “Feel Good Finance.”
How to know if your emotional spending is a problem
While there’s nothing wrong with the occasional retail pick-me-up or impulsive concert tickets purchased in a surge of excitement, there are a few signs to watch out for that mean your emotional spending may be problematic.
The first is how you feel about your spending, Evans noted. Are you often looking at your credit card statement feeling shame or regret? Is the dopamine hit that comes with a purchase quickly followed by anxious thoughts about how you’ll pay it off? Constantly feeling like you’ve “done it again” is often a sign that this is an emotional-spending pattern that could use some work, Evans said.
The second is if you’re consistently spending in a way that doesn’t align with your goals. Whether you’re working toward paying off a credit card, moving into a bigger place or saving for retirement, if you’re overspending or getting into debt and can’t afford those things that are important to you, that might be a sign that you’re often spending emotionally rather than intentionally.
Finally, it’s worth noticing “if spending and searching for that dopamine hit is the first thing you think to do when you are having a hard time,” Evans said. That’s a sign that you could benefit from developing other coping skills to help you navigate difficult emotions.
How to curb emotional spending
Not feeling great about your money habits? Try these tips from financial therapists:
Know your money
As uncomfortable as it might be, “knowing what’s coming in, what’s coming out is paramount financial advice that I would tell to anybody,” Evans said. “A lot of times people have a general, vague idea of what their finances look like.” Understanding your full financial picture (either by yourself, or with a financial therapist or financial adviser) can give you a better sense of your budget and how to track toward your goals.
Track your spending for a week
Konchar suggests her clients keep a note in their phone for a week or two where they log every single purchase, along with how they felt at the time and how they felt after. “We’re checking: Was that worth it? Did it increase your baseline level of happiness or was it just a little spike?” she said.
This also helps you start to see what emotions or situational factors might be triggering you to spend. The key is to be nonjudgmental when tracking. Don’t beat yourself up over a purchase, just focus on collecting data and looking for patterns.
Check in with your emotions before you’re in a position to spend money
The best way to prevent emotional spending is to catch those emotions well before you check out, Evans said. Before making any purchasing decisions, take a minute to pause and name what you’re feeling and what you really need in that moment. If you’re feeling especially bored, lonely or sad, do something to address that need first (call a friend, go for a walk, journal, etc.).
If you’re prone to spending money when you scroll, do that same emotional audit before you settle in on the couch with your phone, Evans suggested.
Create a dopamine menu
There’s no question that buying a new pair of shoes will give you a boost of dopamine. But there are plenty of other ways to improve your mood that cost zero dollars — you just might need help remembering them.
Konchar suggested putting together a dopamine menu, or a list of things that bring you joy. “What is it that fills your cup that doesn’t necessarily involve spending money, or maybe not that much money?” That could be watching a comfort show, going for a hike, catching up with a friend in the park or making your favorite recipe. Having this list on hand can make it easier to remember how to care for yourself when you’re going through a hard time, Evans said.
Make it harder to spend mindlessly
All of these tips hinge on you taking a pause before making a purchase, which is often easier said than done. Anything you can do to create friction can help, Evans said, such as not saving your credit card information on any sites or apps, unsubscribing from tempting promotional emails, muting accounts that tend to influence you too hard, or checking your bank account before you enter a store so the stakes feel higher. Konchar said she has a 48-hour rule where she keeps everything in her virtual cart for 48 hours before buying, especially for anything over $50.
Emotional spending can often feel like driving on autopilot, Castillo said, and learning to pause and interrupt that pattern is like giving yourself an exit ramp so you can slow down and make a more conscious choice.
“You can still choose to click ‘Add to cart’ and purchase that item. Nobody’s telling you that you can’t do that,” Castill said. “But oftentimes, this is the turning point where people realize, ‘Oh, well, purchasing $200 worth of candles isn’t actually going to make a dent in this boredom or this loneliness that I’m actually feeling.’”
The post Here’s why emotions drive you to spend — and how to stop the habit appeared first on Washington Post.
