The Psychology of Emotional Spending
What it is, why we do it, and how emotional intelligence can help.
Posted May 12, 2023 | Reviewed by Hara Estroff Marano
Emotional spending is about spending money in response to emotional triggers instead of rational needs. While most people are guilty of emotional spending at some point in their lives, it can significantly impact their finances in the long term. Emotional spending differs from regular spending because it occurs when we allow our feelings (such as fear , panic, overwhelm, anger , and insecurity) to drive our financial decisions.
How Advertisers Use Psychology to Entice Emotional Spending
Advertisers and marketers use many tactics to trigger emotions in their target audiences, thereby leveraging psychology to encourage people to purchase their products or services. Understanding the psychological triggers of consumers has proved to be a game-changer in the world of advertising and marketing as they capitalize on our emotions to make us spend more.
Emotional Intelligence to the Rescue
Our emotions can significantly influence our spending decisions, leading to impulsive purchases, overspending, and debt. But what if we could use emotional intelligence to deal with this behavior? Emotional intelligence gives us the skills to identify, understand, and manage our emotions and those of others effectively. As a result, we can participate in non-emotional spending from a place of financial awareness/consciousness, rationality, practicality, and equanimity (emotional groundedness and clarity). Research shows that our ability to manage our emotions is associated with lower levels of materialism and compulsive buying.
Emotional intelligence provides financial awareness, a key factor in curbing emotional spending. By understanding our financial situation, analyzing our spending patterns, and practicing budgeting techniques; we can gain control over our finances and make better-informed decisions about our money. Emotional spending and compulsive buying disorder are often linked since both are rooted in emotional triggers.
How Compulsive Buying Disorder Can Become Problematic
We all experience emotions, and it is common to have the occasional impulse to buy something when we are feeling down, stressed , or even happy. However, when these impulses become excessive, we may be dealing with a more severe problem: compulsive buying disorder.
Compulsive buying disorder, or shopping addiction, is an intense urge to repeatedly buy unnecessary items, despite the financial, emotional, and social consequences. According to a large survey , about 5% of the population have a shopping addiction. However, approximately one in 20 individuals suffer from compulsive buying disorder at some point in their lives. Being young and female are associated with a higher risk of compulsive buying disorder.
Compulsive buying disorder can affect people’s lives in a variety of ways, including:
Behavioral Health Conditions Predisposed to Impulse Buying
Even if you aren’t dealing with a clinical diagnosis for the following mental health conditions, you can probably relate to some of the symptoms associated with these disorders.
Why Is It So Hard to Reach Out for Help? Barriers like shame and stigma around financial struggle and behavioral health problems often keep people from seeking the help they need and deserve. Because compulsive spending is an addictive, compulsive disorder, sufferers are often in denial that their spending is a problem. They may use defense mechanisms like denial, rationalization , intellectualization , or projection to avoid dealing with their addiction. For this reason, it is important that loved ones find the courage to address the issue with love and compassion and recommend services such as counseling or therapy , consumer credit counseling and debt consolidation, and twelve-step support groups such as Spenders Anonymous, Debtors Anonymous or Gamblers Anonymous. For more exercises and support, consider working through the program in my book, The Financial Mindset Fix: A Mental Fitness Program for an Abundant Life .
The Takeaway Emotional spending can be harmful in many ways as it leads to financial problems, debt, and even a decrease in mental health. By using the psychology of emotional intelligence, you can manage this behavior and avoid the negative consequences. When your emotions no longer drive what you buy, you will experience the relief of improved mental and financial health and resilience .
link.gale.com/apps/doc/A680903276/AONE?u=anon~e47dcba9&sid=googleScholar&xid=b866de00
https://www.researchgate.net/publication/283447103_The_prevalence_of_compulsive_buying_A_meta-analysis
https://www.mdpi.com/1660-4601/15/9/2028
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Joyce Marter, LCPC, is a psychotherapist, entrepreneur, mental health thought leader, national speaker, and author.
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This article is part of the Bringwise Psychology Journal — daily insights on human behavior, mental health, and personal growth.