Are you an emotional spender?

Find out your spending triggers – and how you can keep them in check

Melanie Wright – Virgin Money Living Mentor

by Melanie Wright | Independent Money Mentor

Award-winning freelance financial journalist

However good you are at managing your money, your emotions can prompt you to make financial decisions that could end up costing you dear. 

Emotional spending happens when we splash out on something because we’re feeling bored, lonely, worried, or perhaps because we’re celebrating something, like getting a new job. 

Unless you’re a robot, it’s never going to be possible to keep your emotions out of all your spending decisions. But the good news is there are various techniques you can use to ensure they don’t get in the way of you achieving your long-term financial goals, such as getting on the property ladder, or saving for retirement.  

Here, we look at some of the different emotions which can affect your buying decisions, how to spot your own triggers and some of the ways you can manage them.

Emotions which affect your spending decisions

There are lots of different emotions which can make you reach for your wallet. The main ones include:

  • Stress – when we’re feeling worked up and anxious, buying something can help us feel as though we’re in control of at least one aspect of our lives, even though ultimately, it may lead to even more stress.
  • Boredom – boredom often leads to impulse buys, with lots of us browsing online shops or hitting the high street to entertain ourselves.
  • Excitement – let’s face it, new things are exciting. Whether it’s the latest phone or gadget hitting the shelves or tickets to see your favourite popstar going on sale, excitement might prompt you to rush out and spend.
  • Loneliness – many of us turn to shopping when we’re lonely or sad to help cheer ourselves up. 
  • Envy – jealousy can often spur us on to spend. After all, there’s nothing like seeing one of your peers with something you haven’t got, like a shiny new handbag or that pair of shoes you’ve been hankering after, to make you want it even more. 
  • Happiness – it’s not only negative emotions which trigger us to spend. Often if we’re happy, or celebrating something, we’re prompted to spend to reward ourselves.

Impact of emotional spending

Whilst emotional spending might make you feel good in the short-term, the long-term consequences can be extremely serious, particularly if you’re relying on credit to fund your purchases.

It’s a bit like emotional eating. We all know that cakes and crisps aren’t good for us, but we still eat them anyway because they can provide us with immediate comfort. But shifting the pounds you’ll put on if you do it regularly can take months or even years of hard work.

In the same way, if you over-spend frequently because your emotions get the better of you, it can take a very long time to repay what you owe. 

Even if you haven’t used credit cards to pay for your purchases, if you’re spending any disposable income you have every month, you’ll never be able to achieve all those goals that are really important to you, such as booking that round the world trip, or saving up the deposit you need to buy your first home.  

Identify your spending triggers

Working out what triggers you to spend is the first step to taking control of your negative spending habits.

Think about the times you’ve over-spent in recent months, and the events that preceded this. For example, did you get a pay-rise at work and then embark on a spending spree to celebrate?

Or did you see your friend’s new jacket, feel envious and decide to go clothes shopping so you can have one too?

If you can’t pinpoint what’s prompted you to spend previously, try keeping a simple ‘spending diary’ where you jot down how much you spend and on what, and how you were feeling at the time.

Getting to know your triggers and the feelings that cause them can help you avoid emotional spending. 

Controlling emotional spending

The next time you get the urge to spend, ask yourself the following five questions:

  1. How am I feeling?
  2. Why am I buying this?
  3. Do I need it? 
  4. Can it wait? 
  5. How will I pay for it? 

Answering these questions will give you pause for thought, and help you establish whether you really need to buy something, or whether it’s just an impulse purchase.

It’s also worth thinking about other ways to respond to your emotions rather than spending. For example, if you’re feeling stressed could you perhaps do some exercise instead of heading to the shops? Getting out and about is a great stress reliever and it’ll prevent you from spending money. 

Reading can be another good distraction, so keep a good book to hand and grab it whenever any of your triggers are tempting you to spend. If books aren’t your thing, pick another hobby which will take your mind off spending.

And if you’re still struggling, take a friend into your confidence and give them a call every time you’re tempted. Having someone to remind you of the impact splurging can have on your monthly budget is often just the wake-up call you need.

Being aware of your emotional spending triggers and the ways you can distract yourself from acting on them can make a huge difference to the way you feel about your money. Rather than your spending impulses controlling you, you can put the power back in your own hands, so you can use your money to live the life you want to.

Before making financial decisions always do research, or talk to a financial adviser. Views are those of our mentors and customers and do not constitute financial advice.