People take part in emotional spending for many different reasons. You might have had a bad day at work, a fight with your loved one, and so on. You might even be spending because you are so stressed out about the amount of credit card debt you have racked up.
While a certain level of emotional spending may be acceptable in some cases, it can quickly get out of hand and turn into a problem.
The other day I was watching someone on TV who said that they had tens of thousands of dollars worth of credit card debt due to emotional spending.
This spending may have relieved their stress for a few seconds, but then the reality would always quickly set in that money was a big stressor of theirs as well.
I've mentioned this statistic before, but it is one that will hopefully open your eyes. According to NerdWallet, the average household in the United States (who has debt) has an average credit card debt of $15,611. That is an increase of 2.26% from the amount of average credit card debt in a household in the same period in 2013.
While some of this credit card debt may be due to someone having higher expenses than the income they are bringing in, I'm sure that some of it is also due to emotional spending.
Below are my tips to finally kick your emotional spending habit.
1. Add up your total debt.
You may have been avoiding this but it is something that needs to be done immediately.
Emotional spending purchases add up quickly. I want you to go through your spending and see how much of your recent spending and/or total credit card debt is due to emotional spending.
You'll most likely be shocked and hopefully this will persuade you to change your spending habits and the way you deal with stress.
Related article: Credit Card Mistakes That Can Lead To Debt.
2. Understand why you spend when you're stressed.
People stress spend for many different reasons. As I said earlier, it might be because of work issues, boredom, family troubles, friend problems, and so on.
For a few moments, stress spending may help improve how you feel, but your mood will usually quickly go back to the way things were because you didn't actually solve any of your problems.
In order to stop stress spending, you need to really think about why you have this problem. Without understanding your problem, you might just keep falling into the same cycle over and over again.
Next time you are feeling any stress, you should keep the below in mind:
- The little amounts DO add up. $10 here and there can add up to a crazy amount of credit card debt, especially if you have interest charges and late fees as well.
- Will that purchase actually make you happier? You might feel happy for one moment, but will you still be happy tomorrow? What about next week or next month?
- You probably don't even need that item. If you believe you do, try to think over the purchase for a few days and return to the store if you think you still need it. You most likely won't go back to get it.
- Avoid any offline and online shopping. I hardly ever go to the mall anymore and I never window shop. It's just not something I do as I know I will find something I just NEED. You might even want to go as far as to avoid any advertisements as well, such as on TV, in magazines, and more.
- Stop saying “I deserve it.” Many people who emotionally spend use this excuse. I once used to always use this excuse as well. After a bad day at work, I would stress spend because I thought I deserved it.
3. Think about your financial goals.
Emotional spending can completely ruin your finances if you let it get too out of control. Before you think about spending when you're feeling down, stop and think about what your financial goals are.
Financial goals can help keep you motivated. Whenever I am about to spend money that wasn't a planned purchase, I always try to think about how it might derail my financial goals.
Is the purchase really that worth it?
4. Find different ways to deal with stress.
Next time you are feeling down, you might want to think about doing something more productive so that you don't waste more of your money.
There are many things you can do if you are looking for tips on how to reduce stress and emotional spending. You might want to exercise, sit on the couch and watch a movie, hang out with friends, and so on.
If you really want to solve your stress spending, then you might want to reach the root of the problem. This means actually solving your problems instead of finding ways to cope with them.
It may not be as much fun to some, but instead of spending your money on things you don't need, you could also deal with your stress by using the money you are spending and putting it towards some sort of financial goal. So, instead of buying a new shirt whenever you are feeling down, maybe put that money towards a retirement goal or a vacation fund.
Related article: How To Enjoy Life Without Going Broke.
5. Stick to a budget.
With this post, I'm not trying to say that you should cut out all spending. Instead, you should create a budget for yourself and still include some fun spending as long as it fits in your budget.
A budget is great because it can help keep you in check when it comes to your spending.
Once you realize how much money you have to work with, you will most likely spend less because everything is finally out in the open.
Related article: Do You Need A Budget?
Are you guilty of emotional spending? What tips do you have for a person who is?