Don't calm emotions by spending
HAVE you ever experienced this?
You are stressed or anxious so you spend to calm your emotions.
You feel guilty so you buy presents to make up for the “wrong”.
You are on top of the world so celebrate by buying something.
You feel depressed so you buy things to give you some hope for the future.
And on it goes.
It seems that whatever the emotional state, the need to spend is a common response.
And unfortunately, while chronic emotional spending can provide short-term relief, it rarely “fixes” the emotional problem underlying this behaviour.
Instead, it creates more problems in the form of maxed out credit cards and poor allocation of available spending capacity.
Of course, buying non-necessities occasionally is perfectly acceptable when you can afford it but if your financial position is precarious, we would not advise emotional spending as an appropriate strategy.
So, if emotional spending is a problem for you (or a friend), what would we advise? Here are some suggestions we have given clients.
1. Take time out.
Delay making a decision to purchase until you have had time to consider the implications. Giving yourself at least 24 hours to decide if you can afford to buy the item will reduce your spending and build your emotional IQ so you win both ways.
If you really want the item, maybe dropping a hint around birthday or Christmas time may work too.
2. Avoid temptation.
High risk situations can be overcome by finding an alternative activity. Consciously selecting where you spend your time will affect where you spend your money.
For example, there is a high probability that you will spend money if you visit a shopping centre but a lower probability if you visit a friend.
3. Keep score.
Warning: Some people love this but others hate it – you know where you fit.
Record the victories along the way. Dollars not spent can be totalled to give you more self-respect and maybe a goal to reach. This could be completed in conjunction with a record of the reducing credit card balance or the increasing bank balance.
Ideally, establishing a cash budget (and sticking to it) is the most effective tool here. There are some great online applications that can help you. If this excites you – go for it.
4. Block ads
Reducing the influence of advertisements will help.
The major purpose of advertisements is to encourage you to spend money so ignore or avoid ads to control emotional spending.
Of course avoiding all ads is neither possible nor desirable (ads do serve an educational purpose too) but, like spending, moderation is a good thing.
So there you have it. Emotional spending can magnify the emotional highs and lows but, more importantly, it will damage your finances.
By controlling your emotional spending you will be able to control your financial resources, make better financial decisions and live a more balanced life.
Giving yourself at least 24 hours to decide if you can afford to buy the item will reduce your spending and build your emotional IQ so you win both ways.