Willpower is key to saving money and staying out of debt, but we aren’t all machines. There will be times when emotions get the better of us and we just need to spend some money.
We call that emotional spending and that’s what today’s post is all about.
I’ll discuss what emotional spending is, how to identify it and how to manage it.
There’s no magic bullet here as we’re all susceptible to it, but knowledge is power!
What is emotional spending?
Let’s start with the basics. What is emotional spending and how does it differ from ‘normal’ spending?
Emotional spending is when you buy something for purely emotional reasons.
You don’t need anything. You may not even want anything but you’re going through a strong emotion and feel compelled to buy something.
It could be sadness, boredom, stress or elation or excitement.
The emotion isn’t relevant. It’s your reaction to it that provides the challenge.
I’ll be crystal clear here. There’s absolutely nothing wrong with treating yourself if you have had a bad day or are celebrating a raise or something positive.
Treat yourself all you like if you can afford it and will use what you bought.
The problem comes when you cannot afford it. Or when the items you bought stay in the wardrobe or cupboard with the tags still on them.
The problem with emotion
The problem with emotions is that they get in the way of rationality. None of us are as rational as we think but when emotions are involved, the situation gets worse.
You cannot make reasoned decisions and the willpower you have spent a lifetime working on suddenly goes out the window.
I’m not advocating removing emotion. That’s not possible and not desirable either.
What I am advocating is recognising emotional spending and trying to do something about it.
How to manage emotional spending
Notice I say ‘manage’ emotional spending, not ‘stop’ emotional spending.
It’s near impossible to stop emotional reactions to things. It’s one of our Achilles heels.
Instead, what we can do is:
- Recognise emotional spending
- Redirect the emotion
- Use the 24/48 rule
Recognise emotional spending
The first step to self improvement is to acknowledge there are areas that require it. That’s the case here.
If you’re the type to head to the high street or the Boden website when you have had a bad day, recognising it is your first step.
Once you see what you’re doing, you’re immediately aware of it. It’s one of those things you cannot unsee, which is good.
Good in that you have identified a habit. Once you have identified an unwanted habit, it becomes easier to do something about it.
In this case, once you see yourself heading towards the high street or surfing the internet you can redirect that emotion elsewhere.
Redirect the emotion
I’m not going to pretend recognising and redirecting emotion is easy, because it isn’t.
However, to manage money better and potentially avoid getting into debt, it’s essential.
If you can recognise emotional spending, it is possible to redirect that emotion towards something else. It’s better than trying to supress that emotion that’s for sure!
Redirecting emotion just means rather than doing one thing, you do another.
The key is to find something positive to redirect it to.
For example, if you’re into exercise, go to the gym or for a run instead of to the high street. If you have a dog, take it for a walk and have a play. If you’re a reader, select a favourite book and sit back in your armchair and lose yourself for a while.
The key is to find something you like and take pleasure in.
That’s going to be different for everyone.
If you don’t have hobbies, go for a walk. Some fresh air and a change of scenery can help most people feel better.
Use the 24/48 rule
The 24/48 rule can be used as part of these other tips to help manage emotional spending.
It’s a method I recommend a lot with people who have trouble with spending and with impulse buys.
The rule is simple to say but harder to implement.
When you find yourself heading towards the high street or online to buy something, make yourself wait 24 or 48 hours before you buy.
This gives you time to assess whether you need what you’re planning to buy and time for the emotion to pass.
This ‘rule’ is useful for all kinds of spending and great if you want to save money and avoid wasting it.
Tackling emotional spending
Anyone can be susceptible to emotional spending at one point or another. If you can afford it, there’s nothing wrong with treating yourself.
The challenge comes when you cannot afford it. When emotional spending gets you into debt and threatens to eat up savings.
It’s one of those things that’s easier to say than to do and I fully recognise that. However, it’s also one of those things we all have to do to stay on top of our finances.
