Emotional spending: what is it, and how can practising money mindfulness help?
When you’re upset, stressed or worried, is one of your first thoughts to buy something to cheer yourself up? If so, you might be an “emotional spender”. This might’ve become even more of a habit during lockdown, where we were unable to reward or commiserate ourselves with experiences in the outside world and so placated our feelings with online shopping and deliveries. And now, amid a cost of living crisis, many of us are finding ourselves riding the “treatwave”.
If this sounds like you, don’t worry. “Emotional spending” isn’t necessarily a bad thing, and is actually the norm for most people. We may not be aware of it at the time, but feelings of hope, fear, guilt, shame and boredom can all play a significant role in constructing our financial habits.
“How we view money is tied to memories and experiences. It’s complicated and emotionally charged,” Gabi Slemer, founder of Finasana, an online financial literacy platform, tells Stylist.
Slemer says that to truly understand our spending habits, we have to accept that more often than not, our emotions try to hijack our behaviour around how we spend our money. For example, if your family had to be conservative with money when you were younger, you may be more likely to splurge once you gain financial freedom to make up for it.
“How we grew up, our childhood experiences around money, what cities we live in, what media we consume, who we spend our time with, and what we do for work all have a massive influence on how we spend our money, whether we realise it or not.”
Our emotions absolutely affect our spending,” agrees Olivia Dornan, an integrative therapist at the Priory’s Woodbourne Hospital. “We associate shopping sprees and treating ourselves with self-care and reward, which there is nothing wrong with from time to time. However, this can become an issue when spending large amounts of money becomes associated with being happy.”
Is emotional spending a bad thing?
Not necessarily, says Slemer. Research has found that spending money, particularly retail shopping, can be beneficial as it can reinforce a sense of personal control over our environment, ease feelings of sadness and feel like a positive personal achievement. The same study also concluded that the act of shopping can simulate our senses and ease feelings of anxiety.
However, when spending money becomes the primary outlet for regulating and managing your emotions, that’s when problems begin to arise.
“Money is the leading cause of stress, ahead of even work or relationships,” explains Slemer. “Stress over a long period of time can cause mental health issues.” Emotional spending, in her words, “can be a vicious cycle if left to run wild.”
What are the dangers of emotional spending?
Slemer says that if emotional spending is either digging you into debt, preventing you from getting out of debt or preventing you from saving for the future, you could find yourself in trouble.
“The decisions we make today directly influence the lives we lead tomorrow, and emotional spending in the present could be setting us up for financial distress in the future,” she says.
Even before the pandemic, the Money and Pensions Service estimated that 9 million people in the UK were over-indebted, and over 11 million adults had less than £100 in savings. The pandemic and multiple lockdowns will only have exacerbated this, due to a loss of income or increased spending out of boredom and to curb anxiety.
Indeed, Dornan sees emotional spending as a natural response. “If you’ve found yourself spending a fair bit of money during the past 18 months, your emotions could have had a part to play,” she says.
“Take a person working from home full time during the lockdowns, isolated and unable to do the ordinary things in their routine that help them stay happy and grounded. What can this person do to reward themselves for their hard work when they’re unable to go out or see friends? They may take to ordering one or two takeaways a week or ordering more on their shopping list to treat themselves.”
How to be more mindful when emotionally spending
Slemer says that the key is accepting that not all of our spending decisions will, or have to be, 100% logical. “It’s not about only making the “right” money decisions, but as long as we make more good decisions than bad ones, we can feel pretty confident in our finances,” she stresses.
So how can you tell whether you’re spending mindfully or emotionally? “We need to create more space in the purchase, from the first thought process to the credit card swipe,” Slemer explains.
“Many times we don’t even ask ourselves these questions and our spending decisions are done on auto-pilot, which means emotions are probably in the driver’s seat. Ask yourself: do I need this or do I want this? Am I ordering an Uber because that’s what I always do or because it’s late and an Uber is the safer option?”
“Take notice of patterns when you’re spending impulsively and to excess,” agrees Dornan. “Instead of tapping your card, be mindful of what you’re actually feeling. Sometimes you may just need to talk it out with a friend or change your environment to work through these feelings instead of spending excessively.”
However, it’s important to remember that it’s okay to buy the shoes and have the takeaway. “It’s only when you’re noticing it is happening a little too frequently that you might need to take action,” she adds.
Dornan also stresses the importance of self-care to support emotional regulation, reduce stress levels and help us to stay connected to ourselves. “It’s okay to practise self-care in ways that require money, but having a few other backups that are being regularly practised before an emotional build up happens can be very useful,” she says.
“However, if financial stress is severely affecting your life, you should seek professional help. Either speak to your GP, or consider speaking to a therapist about the issues you are having.”
Speak to a financial adviser registered with the Financial Conduct Authority before taking any financial advice, and think carefully before making any decision.