Do you know the feeling of impulsively buying something, only to regret it afterwards? Impulse spending is an increasingly common problem, and can often lead to an overextended budget and clouded financial standing. However, it doesn’t have to be this way! Recognizing the triggers that lead you to emotional spending and practicing mindful consumption are two ways to curb impulse spending. Read on to learn more about overcoming the emotional triggers, and gain more control of your budget.
1. Recognizing the Risks of Emotional Spending
When it comes to our finances, it’s important to recognize the risks involved. Emotional spending is one of them. It’s an all-too-common mistake that can have lasting implications if left unchecked.
Emotional spending occurs when we make decisions regarding spending or budgeting outside of what is logically sensible. Unrestrained and driven by emotion, we can find ourselves making purchases that we may not be able to afford or weren’t prepared for. It’s not a difficult spiral to fall down – we all have moments of weakness where we might succumb to the temptation of a retail therapy session.
Here are some key signs of emotional spending:
- Shop more frequently than needed
- Spend impulsively without prior planning
- Purchase items that don’t align with your goals
- Unexplained guilt or regret after a purchase
It’s important to be aware of these signals – if you notice yourself behaving in such a manner, consider the reasons behind it. It might not simply be the excitement of getting the latest gadget, but a deeper motivator such as depression, boredom, or stress. Consciously and intentionally stopping yourself in those moments of weakness, can save you from committing a grave mistake.
If emotional spending begins to become a regular habit, it’s important to recognize and address the issue before it throws a wrench in your financial well-being. Consider discussing the issue with an independent financial advisor or seek advice from an expert. Taking small steps towards recovering from emotional spending is key in order to restore financial control and better manage your finances.
2. Uncovering and Alleviating Triggers of Impulsive Purchases
We know it can be difficult to resist the urge to make an impulsive purchase. Even if you’re not generally an impulsive shopper, you may be more prone to spontaneous buying when your emotional state is susceptible to suggestion. But why do you make these reckless purchases and how can you limit the damage?
To answer this, you first have to identify what triggers you to make such purchases. The following can all contribute to the temptation, and understanding them can help you spot patterns in your own behaviour.
- Boredom. On those days when you have absolutely nothing to do, and scrolling through sites like Amazon and eBay seems entertaining, you may find yourself in the checkout process within minutes.
- Retail therapy. A bad week, a breakup, or a stressful life event can push the wrong buttons and make us more liable to compensating with a quick fix purchase. Often it’s way too expensive for the little comfort it can bring.
- Novelty. Something shiny and new can seem very tempting and there’s almost a “fear of missing out” element to it as well. Shopping can seem like an entertaining game, until it’s time to look at our bank balance.
- Competition. Going shopping with friends can become a confrontational affair. The “one-upmanship” nature of it can be intimidating and we can find ourselves wanting to purchase just to “keep up” with our peers.
Once these triggers are identified, steps can be taken to limit their influence.
The first thing to do is to be consciously aware of what’s driving the purchase and whether it’s really necessary at that moment. Once the reason for buying is understood, this gives you an opportunity to make more rational decisions. Secondly, leaving credit cards at home can be a beneficial exercise to prevent reckless spending. If cash is used to make more tangible purchases in a measured fashion, we can connect with the value of the products being bought. Lastly, as social media becomes a bigger part of our world, it’s important to limit the amount of time you spend looking at online ads and sponsored posts. Constant bombardment of “Buy this” or “You need that” can be hard to resist.
By recognizing what triggers you to make impulsive purchases, you can take steps to counteract them. With conscious awareness and a “cash in hand” approach, you will be able to make better decisions and keep your bank balance at healthier levels.
3. Developing a More Mindful Approach to Consumption
We routinely consume product after product without a second thought – but would it be beneficial to pause and think before we buy? could be the key to leading a more sustainable lifestyle.
Understand your needs: Many people consume without understanding their needs. Before diving into online shopping, make an effort to question the items you’re browsing. What do you actually need? Identify what’s necessary for everyday life and make sure your shopping list is rational and fulfils specific needs.
Avoid Impulse Buys: Shopping out of boredom or restlessness increases your chances of impulse buying. This is wasteful and often leads to unused items gathering dust in the back of cupboards. To prevent yourself from wasting money or impulse buying, divert your attention away from consumer goods. Strive to find contentment in activities other than buying.
Shop Smartly: Shopping is much easier with convenience stores and fast delivery services – but it’s commonplace for shoppers to over indulge which increases unnecessary packaging and product waste. To shop smartly, think carefully about which items to buy in bulk, and which ones to buy less of. Also, choose brands that have sustainable practices and recycle plastic packaging.
Invest in Quality: Quality items don’t necessarily need to be pricey, but they do require more research, saving potential and patience. Make sure to research a product thoroughly before purchase, and invest in materials that last – this will help reduce the total amount of products you use, and it may even save money in the long run.
Recycle & Reuse: Finally, once products have reached the end of their life, recycle them either through local systems or agencies. Alternatively, donating goods and clothes to charity or second-hand shops, or reselling items is also a great way to reduce waste and extend the life of products.
4. Finding Ways to Remain in Control of Finances
We all want greater control over our finances, and while it can feel overwhelming there are ways to achieve this. Here are four great ideas for gaining control.
Shop smarter: Instead of blindly buying what you need and want, create a list before you head to the grocery store. This way, you’ll be less likely to be tempted by out of budget-items. You can also set up deals with local surgeons, compare prices, and take advantage of promotional offers such as bulk-buy discounts.
Create a budget: Establishing a realistic budget and tracking your expenses is the best way to stay on top of your finances. You can use a spreadsheet or personal finance app to easily keep track of where your money is going and where you should be spending it.
Automate your payments: Wherever possible, automate your bills, rent payments, and other obligations. This way you’ll never forget to pay a bill or have to wait in line to bank hours for an overdue payment.
Pay yourself: Figure out where you’re overspending and create a plan to save money each month. Immediate additional savings can be allocated to build an emergency savings fund or put towards debt. Even making small deposits can do wonders for your financial future.
- Stick to your list!
- Monitor spending & budget wisely.
- Take advantage of automatic payment options.
- Set aside a portion for yourself.
By following these simple steps, you can take the stress out of managing your finances and gain the power and confidence to take control of your personal financial situation.
Being mindful of your spending habits is the best way to achieve your financial goals. By being aware of what triggers your impulse to spend, and replacing it with smarter and more conscious shortcuts, you can stay on track with your budget and live a richer life.
