A friend, let’s call him Aaron, used to buy the latest everything: sneakers, designer clothing, gadgets off Amazon and more. He estimates that he spent five figures over a year.
“I was mentally distressed and didn’t even know it. I was spiralling,” he says. “There were a lot of factors in my life causing depression and spending was my drug of choice to cope.”
Prime days, Black Friday, holiday sales, and that extra 10% off if you just click your full cart. Canadians are now in a major shopping season and there’s encouragement everywhere to click and pay almost instantly.
It’s not always clear what leads to our over-spending. But these days, buying for that emotional rush can be a symptom of a larger problem.
What is emotional spending?
Have you ever shopped because you were bored, stressed, unhappy or even happy? That’s emotional spending – also known as impulse buying or impulse spending.
Researchers at Butler University found that emotional spending happens because it’s a way to exercise some control during an overwhelming period of negative emotions or poor self-esteem. They also found evidence that people get a hit of the happiness hormones (e.g. serotonin, oxytocin and dopamine) when they buy.
The COVID-19 pandemic has also affected Canadian shopping habits. Brick and mortar sales may have fallen but online purchases have skyrocketed. Statistics Canada found that between February and May 2020, online sales surged 99.3%, hitting a record $3.9 billion in May.
Canadians are now being told to buy local, to support retailers while ads continue to shape our desires to shop. And, it’s so easy to click and buy. So, it’s no wonder people turn to shopping to as a way of making themselves feel better.
How to deal with emotional spending
Acknowledging that 2020 has been an especially trying time, let’s look at coping mechanisms.
1. Identify triggers of emotional or impulse spending
Take the time to figure out what triggers your urge to buy.
Aaron says that during a period of turmoil both emotionally and mentally, he saw shopping as therapy to make himself feel better. As part of identifying triggers, consider journaling especially when you feel negative emotions.
“I was forced to [confront my triggers] because it was becoming damaging to those around me,” he says. “I cancelled any credit card that my wife didn’t have access to. I sold things that we deemed unnecessary. And, I tried to communicate more about how I’m feeling and the things that cause it.”
2. Try new hobbies
They can help you work past the triggering emotions and help you avoid spending.
Look for low- to no-cost activities like walking, exercise, drawing, writing, etc.
3. Remove fast access to spending
Disable your PayPal account, remove your credit card information from websites, disable automatic filling in of your banking information and consider cancelling any unnecessary credit cards.
Are you using cash? Limit your spending by taking out a set amount and leaving your debit card home. This will prevent spontaneously spending during heightened emotional periods because you’ll have to take the time to find your cards and go through the buying process. That breathing room can help you step back, identify your mood and choose an alternative.
4. Create a budget that works for you
And don’t make it a stringent one. A strict budget can actually cause you to spend more because you’ve left no wriggle room for the occasion, in-budget, treat.
People who are prone to emotional spending and don’t have a reasonable outlet can overspend, so budget a little wriggle room.
You can even use an online budget calculator like this one to help you take charge of your money. A budget calculator can help you manage your spending and see if you’re:
- falling short,
- breaking even or
- coming out ahead.
Just remember to create a budget that’s flexible and works for you – and one you can stick to, month-to-month.
5. Set new financial goals
Having a list of new goals or financial priorities can help you resist emotional spending.
It could be a major home purchase, a trip when travel picks up again or saving towards retirement. Whatever it is, write it down and keep it where you can see or access it when the urge to shop rises.
6. Try a no-spend challenge
There are several no-spending challenges that could help motivate you to avoid spending. They often have established goals that can provide the structure you need.
Popular no-spending challenges include not spending any money for a day or for a week. Other challenges include avoiding impulse purchases on new-to-you clothing. There’s also the challenge of not going to the grocery store until you’ve used up everything in your cupboard.
Whatever challenge you do, make sure to start small. Don’t spend for a day or two then work your way up to bigger goals. It also helps if you have a place to put the money you saved. It could be in a high-interest savings account or in an emergency fund.
7. Try to avoid advertising
It’s everywhere and ramps up during this time of year but there are ways to avoid advertising.
Unsubscribe from all retail emails and avoid visiting any shopping or retails sites that might encourage shopping.
Another option is to install an ad blocker so you avoid seeing advertisements. You may even want to avoid Instagram because of advertisers and influencers promoting products.
8. Treat yourself smartly
There’s absolutely no reason to not buy yourself something nice once in a while. In fact, it can be a mood boost. Just make sure that you’re buying for the right reasons and you’re not using shopping as a solution for something more serious.
Make a plan for your shopping, create your budget and keep that list with you so you don’t get tempted.
9. Get professional help when you need it
A serious shopping addiction can seriously affect your finances, your credit score and your relationship with your loved ones. If you feel like you may have a shopping addiction, you may want to consider professional help from a therapist or psychiatrist.
If you have benefits at work, find out if it includes an Employee Assistance Program (EAP). This program can give you access to mental health-care services, like e-therapy or virtual counselling, to help you deal with emotional or impulse buying.
Don’t let emotional spending hurt your finances or your relationships. Find a mental health care provider in your area to help you overcome your shopping addiction.