In reality, people don’t buy things purely for logical reasons, but partly for emotional ones. Problem is, most people buy recklessly and don’t know how to control their spending as much as their emotions. Buying something you don’t really need when you’re stressed out, bored or feeling particularly low is emotional spending.
Yes, it gives you a temporary emotional boost but why would you ruin your budget for something that temporary, something that’s just guaranteed to give you long term problems?
Emotional spending can lead to you draining your bank account in the most unwise way possible—and then there’s also the possibility of you landing in credit card debt.
What to know how you could curb that destructive impulse to spend? Here are the 3 top reasons for why you shouldn’t do emotional spending:
1. It’ll compromise your long-term goals
It’s ultimately a matter of self-control—as most things are, in this world. You’ve got to be on your guard, every day, every moment. So keep your eyes on the goal. No matter how sad or lonely or low you feel, remember that you have a goal and it’s not going to be worth it if you buy something that gives you temporary happiness when it’s going to compromise your plans for the future. For instance, are you saving up for a house? Or maybe you’re already paying for one? Then that means you’re already working with a set budget every month. If you give in to that unholy urge to spend, you could be spending a portion of the money that you should be setting aside for your monthly mortgage payments. That can’t be good—no, that can’t be good at all.
Constantly remind yourself of your goals. To keep you on track, always remind yourself that you have a goal and that you are serious about this goal. One way you could keep yourself and your impulses in check is to put a photo of your dream car or dream house pinned under your ref magnet, bathroom mirror or in a frame by your bed. This will help you see your goal, literally, every single day. Nothing gets you excited in the morning more than the thought of a long-term goal finally coming true.
Better yet, you could also write down your goals. Make a list and recite the list to yourself.Go through every single item on that list, before you sleep and as soon as you wake up. Write down your financial dreams. Do you want a house? Several houses?A car?A family? While the last one might not be as easy as the others, telling yourself every day of these goals strengthens your resolve. It reminds you of how important it is for you to stick to your budget, and that to deviate for even one week or two could have disastrous effects on your financial goals. So better not go down that road at all.
And if there are times that you find yourself tempted like nothing else ever had—moments like this will come, moments that make you question your resolve, that make you think it’s all right, that it’s okay to spend too much or beyond your budget, that you’re going to make up for it anyway later, or at some future date—when this moment comes, control it. Don’t give in. Keep to your resolve, and your budget.
Practice delayed gratification.So you can’t stop thinking about the latest iPhone out in the market or the latest Macbook Pro Air or the newest kick ass plasma TV to ever hit the stores—then sleep on it. What is it you want most in the world at this moment, something you could buy, by getting it on credit or by borrowing money from friends or relatives to pay for it? What is that one thing you think you can afford but actually can’t and buying it will not only result in you landing yourself in debt?
The truth is, there is no one thing. There is no single thing in the world we want enough—or at the very least, we should want enough—for us to actually consider and allow for the possibility of landing ourselves in debt. Financial security should come first.
And also because there’s always something we want, something we wish we could buy, something that makes us salivate at the simple thought of owning it. But it’s rarely important. Why? Say, you want a watch. Do you really need it? Can’t bear the thought of waking up in the world with your wrist bare and empty? Now, why is that? Why do you feel incomplete without it? Does that mean you derive your self-worth by the watch you own? By how much it is? By how much people will think it is?
Say you want a laptop. Why? Because you need it for work? Then sure, go ahead and buy one. But why can’t you settle for a model from a lesser known brand that works perfectly fine too rather than trying to stretch your budget to get a top-of-the-line model from the more popular brands? Because you like it? Would you also like it if your savings account comes up empty, then?
Make it a practice to sleep on every buying decision. If you think you really need something, then go ahead: buy it. But give yourself time to really decide on whether you need it or not—and not on whether you really want it or not. Sometimes, most things we want only look good at first glance. After some time, the novelty wears off and you find yourself wondering why you ever thought you wanted it in the first place.
Assess yourself. If you know you have a problem with self-control, then try your very best to avoid malls and stores. Keep your credit cards away from you. Protect yourself from that destructive impulse to spend as much as you can just to make yourself feel good and on top of the world. Make a routine. For instance, you could window shop when the stores are already closed.
If you really must shop for something you need, try to bring along a trusted friend who knows how much you’ve been financially struggling, and ask this friend to help you stick to your shopping list and stop you from making a beeline for the counter with your arms loaded with things you don’t need.
Imagine yourself paying for your purchases with cold cash. You know cash is a better mode of payment than credit cards because you can easily track what you pay for and get a solid idea on whatever amount that’s left. So if you haven’t got enough money, that’s a pretty big deterrent to you spending like there’s no tomorrow. That’s not usually the case with a credit card. A credit card usually gives you a higher credit limit that might often make it seem like you have plenty of shekels to spend—when you actually don’t.
Identify what triggers you. Is it your credit card rewards? Is it the ease of paying? Is it the mall sales? Using your credit card is really that attractive. But while that’s good, a lot of people who find themselves drowning in credit card debt serve as a cautionary tale for you.
Recognize what your emotional spending triggers are and find a few handy ways to distract yourself. Join in groups, whether online or live, for discussions and advices. Use your cash more so when you think you’re an impulsive buyer but a bad payer. In that you way, you could easily track your cash flow.Forget about the reward points and focus on your goals.
Freeze your card. If this means putting it in the fridge for you, then do it. Just stop using it or better yet, call your credit card company and cancel it just so you could break your addiction to emotional spending. If you can’t do that, always leave your card at home. Instill in your mind that you don’t need your card and you don’t like to use it that much. This is especially ideal if you’re in debt. As the saying goes, if you want to get out of the hole you’re in, first, stop digging!Walk baby steps and use cash to pay your bills, lunch, groceries, etc. from your withdrawn, budgeted cash. It will help you track your expenses and inflows better.
3. You should value time, money, and friends over material gains.
No, you don’t need that jewelry. You’ll need that money for some bonding time with friends. Diverting your time and attention is a good tactic. You might just want to enjoy a nice change of scenery and splurge on some vacation time to go out and get some fresh air with loved ones rather than spending all your time holed up in the office and working the day away.
Give yourself a break and a chance to reconnect with loved ones. This will nurture good feelings and vibes. The more positive you are in general, the more positive you would be about your outlook on saving. So practice the value of spending time on ‘nows’ that are more helpful to you, than focusing on a series of ‘nows’ that do nothing for you at all, except to add unnecessary stress and worry to your day. To help you out, here are a few alternatives:
Clear your mind. You need to go outside. Go for a change of scene. This often helps control emotional spending triggers. Go anywhere you like and clear negative thoughts and feelings—anywhere but malls.
Catch up with friends. Of course you miss your friends and you might want to spend Friday night swapping stories and catching up. Prepare a good meal and share a few hours of conversation with great friends—it’s a good way to escape negativity, frustrations, and emotional spending.
Value your health (and wealth). Forget about the gym and run around the field. It’ll help you curb your emotional spending in such a way that exercising can clear your head. If you feel the urge to give in to emotional spending, go out and pull your rubber shoes for a quick run or look up for some fun exercise routines online to work those negative emotions out of your system.
Here are the 3 main reasons for why you shouldn’t do emotional spending. Hopefully, reading through all that made you realize many important points on why emotional spending is bad and gave you a few solid ideas on how to deal with it and permanently cut it off from your life—the soonest time possible.
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***Photo thanks to 401(k) 2013***