Emotions and impulses influence how we spend our money. To some degree, it is natural to seek emotional gratification from the fruits of our labor, but it is important to remember that emotional spending and impulse shopping are two of the archenemies of healthy personal finances.
Key Points:
- As an expression of your values and inspirations, spending always involves emotions.
- Reactionary spending is a way to give up the future for instant gratification. Intentional spending involves long-term thinking about financial goals.
- Debt is often the result of reactionary spending, but debt relief efforts are an expression of intentional action.
- Dealing with your debt and avoiding impulse purchases can improve your emotional health.
When you allow emotions to control every financial decision, you can become stuck in a reactionary mode, constantly chasing instant gratification and failing to attach a deeper intentional strategy to the way you handle your money.
The commercial system around us is designed to perpetuate that type of reactionary thinking. It is built on the theory of consumerism, in which the consumption of goods and services in large amounts is seen as good for the economy and, by extension, good for the individual.
However, embracing that mentality can lead to unbridled spending and serious debt. Let's take a look at two different approaches to spending: reactionary versus intentional.
Reactionary Spending
Being reactionary means to grant importance solely to your current circumstances, wants, and needs without considering the future consequences of your actions. In this state of mind, you react to life, failing to shape it. You relinquish any semblance of control, allowing events to carry you along.
Reactionary spending is sometimes referred to as emotional spending because it requires emotional energy as well, though it does not invest this energy into anything constructive. Instead, it uses it to create chaos, the costs of which you later have to pay, in the form of lack of financial progress, credit card debt, and added stress and worry.
Intentional Spending
Intentional spending redirects your emotional energies toward long-term financial thinking. To act with intent is to act free of distraction, with purpose, in pursuit of a future vision. A few psychological tricks can help ensure you are acting with intent when making a purchase. Before committing, ask yourself some questions.
- Do I need this product/service, or can I get by without it?
- Will buying this product/service get me any closer to my long-term financial goals?
- Will this purchase result in an outcome I desire?
If your answer is “no” to any of these questions, you may be contemplating making an impulse purchase. Think carefully before proceeding.
Emotional Spending and Debt Are Connected
The connections between emotional spending and debt are strong. Consumerism-focused society wants you to keep spending even when you run out of money. It bombards you with ads through TV, online media, and every available bit of real estate in town. Steeped constantly in this atmosphere, it is easy to fall into the trap of equating spending money with doing good or feeling good.
There are other emotions tied to spending as well. Scott Rick, Associate Professor, Marketing, University of Michigan, notes regarding the emotions attached to spending: "Making choices about what you’d like to buy helps to restore a sense of personal control over your life. This can help to alleviate negative emotions like sadness or anxiety, which tend to be associated with a sense that ambient, external forces —like natural disasters or pandemics—have taken control."
Syon Bhanot, Assistant Professor, Economics, Swarthmore College, points out the danger of emotional spending in this way: "Purchasing something involves getting something NOW, and in a world of credit card debt, often means not paying for it for quite some time. Therefore, we are in a sense hardwired to overspend in the short run and rack up debt—and the evidence is everywhere that this is what people are doing, especially here in the US."
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How to Stop Emotional Spending
Avoiding or putting off impulse purchases is a great way to deal with an emotional spending problem. Here are some quick tips to help you kick the habit of impulse buying.
- Never go shopping without a well-defined goal in mind. Take a specific shopping list and only enough money with you to buy the items you have specifically listed.
- If you find yourself reaching for an item that is not on your list, put it back on the shelf. Wait 24 hours to think about the purchase. You will likely find that in that length of time, you will decide you do not really need the item.
- Try to lock ads out of your life as much as possible. Install an ad-blocker on your computer, and do not watch commercial TV channels. Ad-blindness is a real thing. Try to develop it.
- Try to avoid situations that tempt you into emotional spending. Identify your greatest temptation and do your best to avoid it. For instance, if you find that you cannot resist online shopping, make most of your purchases offline.
- Avoid the temptation to choose shopping as a recreational activity. Find something else to occupy your time, such as exercise or a new hobby that does not require extensive material purchases.
Debt Settlement and Emotional Relief
Should your debt situation get out of hand, know that you have options to deal with your problem, even if your situation seems hopeless. Contact a ClearOne Certified Debt Specialist to learn more about how debt settlement works.
When you begin a debt settlement program, you focus your emotional energy on reaching a worthy financial goal: freedom from debt.
Through debt settlement, you can set several smaller goals and see them accomplished as you pay off one account after the other. This approach can help you to gain a balanced view of money and untangle any negative emotional ties you have developed with money over time.
Take care of your debt problem as soon as possible. Start working on it today. Analyze your options and seek help if you need it. ClearOne Advantage Certified Debt Specialists are here to assist you. Contact us today at 866-481-1597 and get a personalized debt relief plan.
