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The Psychology of Spending Money

The Psychology of Spending Money » Financial Stress » The Psychology of Spending Money



Mental health and money problems are often linked. Understanding the psychology of spending money might help you curb your excessive shopping. Those little purchases may seem harmless, but they add up to a dangerous amount.

Are your emotions sabotaging your finances? Or if you get high when you buy, it may be time for a financial intervention. Here are some shopping triggers to look out for and how you can cope with your financial stress.

Nearly half of Americans say their emotions can cause them to buy more stuff than they can reasonably afford, according to a survey by personal finance site NerdWallet.

That makes life tough when you’re trying to pay down debt and save for the future. Still, it sure does feel good – at least for a few minutes – to buy yourself something new and shiny when you’ve got a lot on your mind.

Emotional Triggers for Overspending

Below are six emotional triggers that can cause you to spend more than you can afford – and what you can do instead.

Feeling blue

When you wake up feeling sad, it’s tempting to get on Amazon and buy new electronics, shoes, kitchen gadgets or whatever else catches your teary eye so you can cheer yourself up. But how will you feel when your credit card debt is way more than you can afford?

Next time you’re tempted to buy something because you’re sad, wait a day or so to make the purchase. Meanwhile, take care of yourself with a long walk, a warm bath or a favorite activity while you work out the feelings that make you want to buy to feel better.

Looking for stress relief

If worry and several months of a steady stream of bad news has you stressed, reaching for your credit card isn’t the answer. You’ll regret it later when you pay interest each month on a credit card balance you can’t afford.

Exercise is a natural stress reliever that creates feel-good endorphins, so hop on your bike or treadmill or get outside for a walk or run. Even cleaning your house can be a good workout. So get moving to ease stress instead of going deeper in debt.

Find out: How to Deal With Financial Stress in a Healthy Way

Reacting to anger

When you’re mad, shopping online or at your favorite retail store may seem to calm you, but it’s only a temporary fix.

If you can, talk reasonably with the person you’re angry with and try to resolve the situation. If that’s not a possibility, write down why you’re angry, along with possible solutions that don’t involve charging something on a credit card.

Getting your heart broken

A broken heart is hard enough to heal without receiving a gargantuan credit card bill two months after getting dumped. Don’t let new shoes, expensive clothing, and expensive impulse buys like a new car create one more problem in your life.

Instead, dust yourself off and set some short-term and long-term goals that achieving will make you feel better about yourself than another person ever could.

Trying to impress others

If you’re buying expensive clothes, dining at pricey restaurants, driving a car you can barely afford (if no unexpected expenses come along) and living well beyond your means because you want your friends to think highly of you, that’s a recipe for a ton of credit card debt.

You can still have nice stuff without overspending. Shop the sale and clearance sections online and in stores. Buy a car you can pay off in a few years or a house with a price well under your loan qualification limit.

Most important of all, find – and keep – friends in your life who care more about who you are than what you have. Those are the people who will be there for you when you need them.

Shopping Out of Boredom

When you’re bored, it’s easy to hop online and shop around for whatever item pops into your head. By the time you’re finally no longer bored, however, you could have racked up a whopping balance on your credit card.

Here’s a better idea: Make a list of activities you can do instead of indulging in careless online spending the next time you are bored.

Read a book. Watch a movie. Prepare a new recipe. Go for a scenic drive or take your dog to the park. Any of these things will make you feel better than overspending out of boredom.

Talk to a debt relief specialist to find the best way to pay off credit card debt.

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Signs You Could Be a Spending Addict

If your spending constantly spirals out of control, there could be more to your financial woes than just having too many monthly bills. You might be a spending addict who gets a rush from swiping your credit card, buying rounds of drinks or living a lifestyle that’s beyond your means.

But how can you know if your many purchases stem from addiction to the high you get with each transaction or a true desire to buy something you really need?

Here are five signs you could be a spending addict and how to break the bad habit.

Your credit cards are maxed out

Many of us have maxed out a credit card or two at some point in our lives. After all, unexpected home or car repairs, medical bills or other emergencies can run up the balance fast.

However, if your high credit card balance is due to impulsive purchases for clothing you never wear, fancy dinners out and boxes of electronics and other online purchases that remain unopened, you may be addicted to the rush of spending rather than buying things you need.

Tip: Paying down your credit cards as much as possible to improve your credit utilization rate — the ratio of rotating debt to your available credit — can raise your credit score. Pay cash when you can. You’ll feel the spending pain more (and hopefully spend less) when you see cash leaving your hands.

Your closet is filled with unworn clothing

Okay, we all like a good sale. But when you buy clothes simply because they’re a good deal or on clearance, hang them in your closet and then never look at them again, you could have a shopping addiction that’s never satisfied.

Tip: When you see clothing online, wait a day before purchasing until the initial rush of excitement goes away. You may change your mind. When shopping in-person, leave your debit and credit cards in the car. That way, you’ll have to think about the purchase rather than just whipping out the plastic.

Your dog wears cashmere sweaters

Nobody wants their dainty chihuahua to get goosebumps while walking on a cold, winter day. But did you really need that $200 sweater you bought for her online? And the same goes for that $400 gold-plated cat bed you bought for your purring Siamese.

Is it your pet you’re really thinking about with these extravagant purchases, or is your spending addiction getting the best of you?

Tip: Shop for affordable dog duds at like the rest of us and spend that money on pet health insurance instead.

You hide your purchases

Just like an alcoholic might hide bottles of liquor around the house, a spending addict also wants to conceal evidence of their out-of-control behavior.

Have you rushed home to grab that Zappos box off the porch before your spouse or partner sees it? Do you hide your credit card statements so your significant other won’t see all your impulsive purchases? If you have spending shame, that’s a sign you have a problem.

Tip: Own up to your partner about your spending addiction and ask them for support. Ask them to hold you accountable when you fall off the spending wagon.

You can’t stop watching shopping channels

If your kitchen and home are filled with gadgets and appliances you just had to buy but you never use, you’ve probably got a spending addiction, not to mention a cluttered house.

Tip: Stop watching shopping channels and spend your time meeting with a credit counselor at a nonprofit credit counseling agency instead. They can help you get your finances in order. While you’re at it, consider exploring the reasons for your spending addiction and find ways to beat it with a psychologist or other therapist.

Ways to Help You Stop Impulse Spending

If you’ve ever looked at your credit card statement or bank account wondering where the money went, you’re not alone. Even high earners can find themselves in debt without realizing how they got there.

Plastic makes it easy to separate yourself from your spending. The average credit card balance in the U.S. is $6,270, according to data from Value Penguin. When it comes to controlling spending, some tricks work better than others.

Sometimes it takes more than willpower to get back on the right financial track. And if you have debt you’re trying to repay, the seven tips below can help you bring down those balances.

Do a no-spend day challenge

One of the best ways to control your spending is by not spending. While this sounds simple, it’s anything but. Instead of going all out trying to curb your spending, start small by doing a no-spend challenge.

Pick a day and only buy necessities. Gas for your car, groceries, bills, etc. all fall under this label. What doesn’t qualify? Your morning latte, lunches out, or a quick pick-me-up afternoon treat. Instead, make coffee at home, pack a lunch, and bring snacks.

Challenge yourself to do more than one no-spend day every week. You’ll start to notice the savings quickly adding up as you have more money in your account every month. Add up how much you’ve saved at the end of each no-spend day and put that money toward paying down your debt.

Find out: 10 Steps to Take Control of Your Finances

Shop with cash only

Using a credit or debit card for all of your purchases can separate you from the pain of spending. Shopping with cash means physically handing over dollar bills with every purchase. It also means watching your wallet grow lighter every time you buy something.

Paying with cash can help you stay within budget. Forking over your hard-earned money makes you feel the pinch of spending. The downside of cash is that it can be difficult to track what you spend. To solve this, try using envelopes for each budget line item where you’re planning to use it.

Put the weekly or monthly budgeted amount in the envelope and use only what’s inside for your spending. When it’s gone, it’s gone. To get started, pick one or two categories where you keep going over budget and use cash. This will give you an idea of where your money is going and help curb your spending.

Find out: >9 Budget Hacks to Free Up Extra Cash

Know your budget

Don’t think of a budget as something you put together and maybe check once a week. Doing so is a sure recipe for going over and spending too much. Instead, look at your budget regularly – once a week or every few days.

If it’s hard to keep track of expenses against a monthly budget, divide it up into weekly mini-budgets. This will make it easier to check if you’re going over what you planned to spend and make adjustments. If you have a significant other, make sure to involve them in the process as well.

Find out: Do-It-Yourself Budgeting Tools.

Stick to your list

Another trick to help you control spending is to make a shopping list. Before you head to the grocery store to stock up, make a list of everything you need to buy. Go through your fridge and pantry and check if you’re running low on anything.

When planning out your meal, make sure you have all of the ingredients. Add any missing ones to your list. As an added bonus, do a rough estimate of how much the shopping trip will cost you based on what you plan to buy. Keep an eye on the total when checking out and stay under your estimated amount.

Grab your list when you head to the store – and stick to it. This means not buying anything that is not written down. What if you pass by the dairy section and realize you’re out of yogurt but forgot to write it down? Tough luck, keep moving. This will teach you to get better at writing out your shopping lists and estimating your budget.

Find out: >How to Create a Budget and Stick to It

Institute a cooling off period for items over $50

If you struggle with impulse purchases, designating a cooling off period can help you avoid unnecessary purchases. How many times have you bought something then regretted the purchase a few days or months later?

Impulse purchases can quickly add up over time, putting a dent in your budget. Consumers cough up $5,400 a year on impulse purchases, says a study by That’s $450 extra a month that can go toward paying down debt, your retirement, or padding your savings account.

To help curb unnecessary spending, institute a 72-hour cooling off period for any purchase over $50. This will give you time to consider if you really need the item. Sometimes you may see something that’s on sale or looks cool and you want to have it now.

Taking some time to think about the purchase will give you the chance to decide if you really need it after all. You’ll be surprised how many times the urge passes once you leave the store or click out of the browser.

Unsubscribe from sale alerts

There’s nothing that makes you want to whip out your credit card faster than checking your inbox to find an email about a sale at your favorite retailer. How about those emails offering an extra 30 percent off or free shipping for the next six hours? All trying to entice you to click over and spend money on things you don’t need.

The best way to save your budget – and your inbox – is by hitting ‘unsubscribe.’ Go through your inbox and unsubscribe from all sales emails. Every single last one.

If you’re an iOS user, Apple added a quick ‘unsubscribe’ shortcut at the top of the message. Google’s Gmail app for Android has a similar feature in the top right corner. Alternatively, you can manually unsubscribe from each mailing list. It’ll take some time, but it’ll be totally worth getting back your inbox.

Freeze your credit cards

Trying all the tricks but still failing to see savings? Freezing your credit cards may be just what you need to get back on track. This means literally freezing your cards in water in your freezer. Grab a plastic container, fill it up with water and drop your credit cards in there. Stick it in your freezer and let it harden.

Now, every time you have to use your credit card, you’ll need to let it the ice melt. This will give you enough time to consider whether you really do need to make that purchase after all. The forced thawing out period and added pain each time you need to use your card can be enough to curb your spending.

For this to truly be effective, you’ll need to delete all credit card information from any online retailers such as Amazon or Target that have it stored in your profile. This will prevent you from cheating by going online to make a purchase.

Find out: How to Place a Credit Freeze

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Tips for Putting a Stop to Anxiety Shopping

Nothing makes you want to overspend more than feeling bored, anxious, and worried – three common outcomes of months in self-quarantine due to the coronavirus pandemic. Maybe you’re ready to venture out into the world with a mask again or maybe you’re not.

Either way, you’re still susceptible to racking up credit card debt due to shopping with a worried mind and fear of the next COVID-19 development. The last thing you need now is the additional worry of too much credit card debt. But how can you break your anxiety spending habit?

Step away from the online order

Shopping online with your credit or debit card is so easy, especially if the card information is already registered at Amazon or another site. All you have to do is hit check out and the deal is done, often without shipping costs, so you can even tell yourself you’re saving money.

Tip: Next time you want to order online, wait a day or two before you check out unless it’s an essential item such as over-the-counter medications, vitamins or a necessary household product. You may find that a cooling-off period is all you need to hold off on buying things you don’t need.

Reduce your daily dose of bad news

If your newly acquired excessive shopping habit stems from a need to quell anxiety, at least for a few minutes, by purchasing shiny, new objects, it’s time to go straight to the source of daily anxiety – the nightly world news. It’s nearly impossible to feel calm or optimistic when all you see is heartbreaking stories and doom-and-gloom predictions night after night.

Tip: Cut back on TV news to one or two days a week. If someone creates a coronavirus vaccine, you’ll hear about it from someone. To stay informed without the barrage of TV news, pull up the New York Times online, which now has free access to coronavirus coverage.

Make a grocery list

It’s too easy to grab a bunch of extra items you don’t need while rolling through the grocery store if you go in without a plan. In fact, you can double your usual weekly grocery bill in no time at all by stocking up on snacks, frozen food, paper towels, and other items.

Tip: Write a list of grocery items you need after taking an inventory of what you already have on hand. Prepare your list with meals in mind so many foods can be used in more than one meal.

Tally up recent online purchases

One of the best deterrents to impulse buying while worried about the state of the world is totaling up your online purchases over the last two or three months. Your shock at the total amount may be enough to cause you to go cold turkey on impulse purchases.

Tip: Now that you know how much you spent, pay off those purchases on your credit card to lower the balance.

Deposit the money in savings instead

What if all that money you spent while self-quarantining for two or three months was in your emergency savings instead? It’s too late to get the cashback now but never too late to pay more attention to your savings account than your Amazon account.

Tip: Next time you want to charge $50 or any amount on an online purchase, take that money and deposit it into an emergency savings account instead. It will add up fast.

Only buy essential items

It’s tempting to rack up credit card debt by purchasing clothes, appliances, electronics, and other expensive items to make yourself feel more secure during a highly uncertain time.

However, when the pandemic ceases and/or a coronavirus vaccine is available, you’ll want to enjoy life again, not keep on worrying because you now have a ton of credit card debt.

Tip: Ask yourself, “Do I really need this?” before adding any item to your online cart.

Now matter what kind of debt you have, can help you solve it.

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