Are you an emotional spender? Here's how to trick yourself into stopping — and save money

Emotional spending
Source: Andrey Arkusha/Shutterstock.com
Emotional spending
Source: Andrey Arkusha/Shutterstock.com

In an ideal world, every spending decision would be made with 100% rationality. But we live in a world where purchases are often governed by emotions. In fact, subconscious thoughts may control more of our cognition than we realize — and that can be manipulated by marketers and retailers, according to Gerald Zaltman, a Harvard Business School professor and author of How Customers Think: Essential Insights into the Mind of the Market. 

One major bank was able to capitalize on this tendency by introducing a credit card designed to inspire an emotional connection in millennials. The results, according to Harvard Business Review: "Use among the segment increased by 70% and new account growth rose by 40%." 

Emotions play such a big part in decision-making that most buyers don't even realize it: When observing consumers who claimed to compare brands and prices, those consumers were actually found not to have even bothered looking at competing brands, Zaltman told Harvard Business Review

While it's not necessarily bad to buy things that make you feel good, you can get into trouble if you let your emotions rule your spending to the point where you're making bad money decisions — like going into debt

Source: Giphy

What is emotional spending?

You know that feeling when you've had a bad day at work or you got into a fight with your boyfriend, and you desperately want to hit the mall even though there's nothing you really need?  You know how you end up walking out with two pairs of shoes and the cutest new top? That's emotional spending.

Everyone's been there and done that, but it can become a problem if you do that too much or if your first response to stress is to spend. 

"Emotional spending occurs when you buy something you don't need and, in some cases, don't even really want, as a result of feeling stressed out, bored, under-appreciated, incompetent, unhappy or any number of other emotions," according to Investopedia.  

When you're an emotional spender, you aren't buying because you've made a choice or even because you feel the purchase will enrich your life. Your response to an emotional trigger is simply to get out your credit cards. 

"There is always probably a little component of emotional spending almost anytime with shopping," Melissa Hammel, a certified financial planner and owner of Hammel Financial, told Vanderbilt University. "When emotional spending really crosses a line, we are looking at a coping mechanism." 

In other words, if you're spending money because you have feelings you don't want to feel, you might be in trouble.

Warning signs of emotional spending

Emotional spending is a waste of hard-earned funds. Since you aren't making rational spending choices, you're more likely to buy items you can't afford. 

Of course, you're never going to completely eliminate the emotional component of spending decisions, but you can watch for red flags that suggest emotional spending is a problem behavior for you. 

Here are 6 key red flags US News & World Report suggests you watch out for:

1. Seeking a "high" through shopping to get instant gratification.

2. Telling yourself you "deserve" to make the buy.

3. Spending cash even when you're worried about money or debt.

4. Buying stuff as a response to a stressful event in your life.

5. Spending to try to keep up with the Joneses.

6. Shopping with the intention of returning items.

Also watch out for problematic behaviors like shopping to deal with depression, to avoid confronting difficult situations or to compensate for low self-esteem, warns AOL Finance.

If you find that your go-to response when you get bad news or are feeling down is to hit the mall, you're probably an emotional spender. 

How to stop emotional spending

Emotions are powerful, and it can be really hard to suppress the impulse to buy. You need to give yourself a bit of leeway, so efforts to give up emotional spending don't become another source of stress: To start, take a good look at your budget and set aside some cash you can afford to splurge on yourself guilt-free. "You're much less likely to make big impulse purchases if you allow yourself some smaller discretionary spending," writes Wisebread.  

Source: ramzpaul.com/Giphy

You still need to work on your emotional spending problem, as you're probably going to have a hard time sticking to your splurge budget if you can't get your emotions under control. Some suggestions to stop emotional spending from Investopedia: Make a rule against impulse buys. Limit the advertising you're exposed to. Don't put yourself into situations where you're tempted to spend, and look for different responses to stress. 

How can you avoid situations where you're tempted to spend? 

Never go into stores when you're feeling worried, stressed or sad. Stores are set up to make you want to buy more stuff, and it's more likely you'll give into temptation if your guard is down.

If you really need an item, shop online and search only for what you need instead of browsing the whole website. Consider keeping a master list of stuff you actually need, so you won't confuse needs with wants. 

Hitting the mall? Leave your credit cards at home and bring only a limited amount of cash. And don't be tricked into buying because of sales. Even if something is cheap, it's a waste of money if you don't actually need it. 

Even just not shopping when you're hungry could help: Research suggests hunger prompts you to overspend — even on non-food items. 

"It's probably better to feed yourself before any type of shopping, whether you're going on an actual shopping trip or shopping online," Alison Jing Xu, an assistant professor of marketing at University of Minnesota, told Smithsonian magazine. "If you're really hungry, you'd better think twice before purchasing any items at all, or you might regret those purchases later."

Xu and a team of researchers scanned receipts of 81 department store shoppers and asked those shoppers how hungry they were. Even when controlling for mood and shopping time, hungry shoppers spent up to 60% more than shoppers who weren't craving food. Hunger makes you more acquisitive; you want something to satisfy you, even if it isn't food. 

Another key tip to stop spending emotionally: Recognize the triggers that cause you to buy. Hammel identified common triggers for Vanderbilt University, including childhood trauma that has an unconscious impact on buying choices and feeling like your friends will value you less if you can't afford to keep up with their spending. 

If you're worried, depressed or overwhelmed and your first impulse is to start buying, train yourself to respond in a different way. Whenever you feel the need to shop, go for a walk or call a friend instead. Be careful about going shopping with friends though, especially enablers or fellow emotional spenders. Make your most frugal friend your go-to shopping buddy.

As for the friend that always says, "Hey, that's cute, why don't you get it"? Plan a different way to spend time together.

You can also curb impulse purchases by making a 24-hour rule for yourself: Set an item aside and promise yourself you can come back for it in a day.

Sign up for The Payoff — your weekly crash course on how to live your best financial life. Additionally, for all your burning money questions, check out Mic’s credit, savings, career, investing and health care hubs for more information — that pays off.

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Christy Rakoczy

Christy Rakoczy is a graduate of UCLA School of Law and the University of Rochester. She is a full-time writer based in Florida and Pennsylvania.

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