Eight Ways to Control Emotional Spending
Too much “retail therapy” can hurt your bank account
People often respond to their emotions by spending money. It feels good to get yourself a new outfit, a nice dinner, or some other product that brings you joy or comfort. This is emotional spending (often called “retail therapy”). While it feels good at the moment, too much of it can eat away at your personal finances. Here are some ways to help rein it in.
1. Stick to a budget
Create a spending budget for yourself and stick to it. A monthly budget should take into account all of your bills and expenses as well as disposable income. Depending on your financial situation, you may be able to leave more room for non-essential spending, but if the goal is to cut spending down, set this amount on the lower side, and do not surpass it as you make your way through stores and online shopping.
2. Keep an ongoing list
Maintain a list of the things you need. This includes groceries as well as other household and day-to-day items. Add to the list as needs arise and take items off as you purchase them. Include everything you need and stick to the list as you shop. If you come across an item you think you need, but did not include on the list, skip it unless it's absolutely crucial. Chances are, if you didn't include it in the first place, you didn't need it that badly. This mentality may keep you from overspending in the heat of the moment.
3. Pay your bills first
As you get paid each pay period, make sure you take care of all your bills and expenses before spending on other things. This will not only ensure that you are being responsible about your existing financial commitments, but it will also give you a better picture of how much money you really have and how much of that you should be spending.
4. Get help from your family and friends
Don't hesitate to ask for help from your family and/or friends. If you can recognize your emotional spending behavior, you can tell them about it and explain that you wish to keep it at bay. Ask them to say something to you if they see you starting to purchase items that you clearly don't need. Just knowing that they may say something can help you think twice before putting an item into your cart, since you'll want to save yourself the embarrassment. If the person is with you when you're making the purchase, they can give you the nudge you need to put the item back on the shelf. If you shop along or buy something online, a family member can still say something, and you may be able to return the item.
5. Give yourself time
If you come across something you want to buy on the spot - something you hadn't previously planned to buy - give yourself a certain amount of time to consider before coming back to buy it. This could be 24 hours, or it could be the following week or pay period. In some cases, it can even be as little time as it takes to make your way around the remainder of the store, but if you give yourself a chance to think it over rather than dropping it in your cart and moving on, you may just find that you talk yourself out of it.
6. Don't shop for fun
Shopping is one of the most beloved pastimes in American culture, and while the brick-and-mortar landscape isn't exactly what it once was, there's no denying that people love to shop. If emotional spending is on your list of vices to cut out, however, it's time to stop shopping for fun - online and off - and stick to shopping for needs. Rather than going to the mall or antiquing to see what you can find, consider going to the park, visiting a friend, or doing some other low-cost activity that brings you pleasure.
7. Go out of your way to avoid advertising
Another key to preventing emotional spending is to avoid the appeal of advertising. While ads are not always welcome, specifically trying to keep yourself away from them can prevent you from learning about sales or products that may call out to you. Unsubscribe from mailing lists, don't watch live television, and keep your eyes on the road rather than paying attention to the billboards that litter the scenery.
8. Check your bank account frequently
Finally, keep close tabs on your bank account. Make sure you have your bank's mobile app installed on your smartphone and check your balance on a regular basis. You should always know exactly how much money you have, and by knowing, you can help curb your desire to spend it away.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A. Member FDIC