6 Unique Steps to Improve Your Emotional Spending Habits

Emotional Spending Stigma

‘Emotional spending’ has a negative connotation. A quick Google search of ‘emotional spending’ tells the story…

• “I suffer from emotional spending.”

• “How to avoid emotional spending?”

• “How to overcome emotional spending?”

• “70% of Americans admit to emotional spending.”

• “Is emotional spending taking over your life?”

As a society, we associate emotional spending with suffering, impulsivity, and ineptitude. We have othered ‘emotional spenders’ by believing that they are inferior, irresponsible, and lack self-control. The tragic result of this othering - shame and loneliness. Immense amounts of shame and loneliness. Ironically though, we all emotionally spend and have probably all felt some shame due to emotionally spending.

Emotional Spending |

We All Do It!

Emotional spending is not inherently bad, wrong, or problematic. It is inherently human. We all emotionally spend, because we are all human. We all have feelings, and (I wouldn’t be a Certified Financial Therapist if I did not truly believe) money management is not purely rational. In fact, almost all spending is emotional spending. We spend because…

• We feel a certain way

• We want to feel a certain way

• We want to avoid feeling a certain way

If you feel that your emotional spending is negatively impacting your financial wellness or if you would like to better understand your spending habits, you can take the following steps to increase control of your emotional spending. If you feel that you do not emotionally spend or that your emotional spending does not impact your financial wellness, I encourage (*challenge) you to read step 1 below.

10 Steps to Improve Your Emotional Spending Habits

1. Identify Your Emotional Spending Types

There are a number of emotional spending types. You may quickly and strongly relate with some and less so with others. Identifying the types of emotional spending that you engage in will help you to gain clarity about if you would like to address your habits. If you decide that you would like to improve your habits, your specific emotional spending types will inform the next steps.

• Confidence Spending

Whether you spend a lot of money on hair products due to your alopecia or on skin care products due to your acne or on new clothes since you gained or lost weight or since your recent gender affirming surgery, you are spending on your confidence and self-esteem. It is okay to want to feel good! Increased confidence and self-esteem can lead to increased motivation, reduced social anxiety, better work performance, and more!

• If you are confidence spending, consider also spending money to increase your internal confidence by working with a mental health therapist.

• Hopeful Spending

Sometimes, we really want to (or even do) believe that purchasing a Stanley Quencher or a Louis Vuitton will create change. Change in our self-perception. Change in others’ perception of us. Change in our meaning, purpose, potential, motivation, etc. We think, “If only I had a sit-to-stand desk, I would be so much more productive at work” or “If only I had my own apartment, I would be in a relationship.” Sometimes, purchases really can create change. More often than not though, they do not.

• If you are hopeful spending, make a list of other ways you can create the change you are seeking.

• Hopelessness Spending

Hopelessness spending is common with people who are in debt. For example, a hopelessness spender may think, “Saving $10 is not going to help with my $40,000 student loan debt”. This type of thinking is a slippery slope, leading to ongoing spending and increased debt. You cannot pay off a $40,000 debt without the first $10.

Hopelessness spending is also common with people with depression or suicidal ideation, who spend money because “It does not matter anyway.”

• If you are experiencing extreme hopelessness, depression, or suicidal ideation, you can get help at the Suicide and Crisis Hotline.

• Entitlement Spending

A very common entitlement spending thought is “I work hard. I deserve this.” You do work hard! You do deserve this! You also deserve an emergency savings account that brings you emotional safety and security and allows you to sleep soundly at night. You also deserve to be able to afford a vacation and to one day retire!

• If you are entitlement spending, reflect on why you feel entitled - dig deeper than ‘I work hard.’

• Make a list of non-material things that you deserve.

• If you think you may be overworking, consider attending a Workaholics Anonymous meeting.

• Insecure Spending

The proverbial ‘Keeping up with the Joneses’ or ‘Imposter Syndrome’ spending can also be categorized as insecure spending. While at Happy Hour with friends, they decide to order dinner in addition to drinks. So as not to let on that we cannot afford dinner, we order a large plate of nachos. In this case, our own insecurities are driving our spending. We worry what our friends will think if we do not order dinner. Your friends are probably not thinking about that though. As Rich Dad Poor Dad author Robert Kiyosaki says “No one cares more about it [your money] than you.”

• If you are insecure spending, create some spending affirmations for yourself using these templates.

• Fear Spending

Fear spending comes from a scarcity belief. In late March 2020, grocery store shelves around the country were completely empty. We truly feared that we may never be able to purchase toilet paper again, so we purchased as much as we possibly could. The idea of scarcity drives fear spending. Sales create similar thoughts, such as “The sale ends tonight at 9pm, so I must purchase this right now.” While we know that there will be another sale (probably starting tomorrow), our fear propels us to make the purchase immediately.

• If you are fear spending, consider the likelihood your fear will actually happen before making a purchase and complete this What Could Happen worksheet.

• Exhaustion Spending

When we are physically and \ or emotionally exhausted, we have less self-control. After a long day of work, we spend money on DoorDash so we do not have to cook. While shopping with our child who has a tantrum about a new toy, we give in and purchase it, so they will stop crying. While exhaustion spending might feel like the answer in the moment, it is a band-aid. Not a cure.

• If you are exhaustion spending, consider what you can do to rest and take care of yourself.

• Create a list of cures. For example, the answer to exhaustion spending may be setting better work boundaries or delegating.

• Revenge Spending

Societally, revenge spending has been particularly common in the past two years. Spending was limited during the pandemic, and according to the Federal Reserve, Americans saved substantially more during 2020 and 2021 as a percentage of their income than ever before. In response, people are overcompensating and excessively spending money, particularly on travel, in an effort to reclaim lost years.

Revenge spending can also happen within a relationship. For example, someone purchases a new 85 inch tv. Their partner, upset about the purchase, purchases a brand new i-Phone and Apple watch. This tit-for-tat spending can escalate and create financial difficulties, such as credit card debt.

Another form of revenge spending within a relationship is in response to emotional harm. For example, “My partner cheated on me, so I deserve to buy this.”

• If you are revenge spending in a relationship, learn more about healthy versus toxic relationships, as revenge spending can be indicative of other problems within a relationship.

• Indecisive Spending

Some of us are indecisive. We hate making decisions. In an effort to avoid making the wrong decision at all costs (pun intended), we make several purchases. We did not actually have to make a decision - problem solved! Or not. Indecisive spending can take a toll on your finances and can also leave you with more ‘stuff’ than you need or have physical space for.

Other people who are indecisive avoid making the wrong decision by simply not spending money.

• If you are indecisive spending, practice validating your past purchases to build your confidence.

• Remember that most purchases are reversible - commit to a decision and know that, worst case scenario, you can change your decision later.

• Boredom Spending

Some people scroll Instagram or Tik Tok when they are bored. Other people binge The Ultimatum: Queer Love (still waiting for Season 2!). And others online shop. Online shopping is soothing, decompressing, and enjoyable. Online shopping also provides a dopamine hit, which is why boredom spending is particularly common with people who have ADHD. While boredom spending is not meant to cause any harm, over time it can lead to significant financial stress.

• If you are boredom spending, make a list of other activities that you can do. When you feel bored, refer to this list before online shopping.

2. Differentiation

Now that you are aware of your emotional spending types, you can differentiate yourself from them. You may carry a lot of shame about yourself due to the stigma of emotional spending. It is time to let go of the shame. Emotional spending is what you do (a behavior). Not who you are (an identity).

• Write a list of your identities (parent, sibling, coworker, surfer, artist, teacher, etc.) and positive qualities.

• Write down one behavior you would like to change.

• Reflect on how your identities and positive qualities will help you in changing this behavior.

• Reconstruct your thinking errors.

  • Old thought: I am a revenge spender.

  • New thought: Sometimes, I spend money when I am hurt in an effort to seek revenge.

3. Slow. Down.

Slowing down is a crucial step to improving your emotional spending. We move so fast. Slowing down will allow you to become more aware of your habits as well as the drivers of your behaviors. After all, if you do not recognize that you are emotionally spending as you are emotionally spending, you cannot change the habit.

• Notice your emotional spending triggers by asking, “What people, situations, time of day or year cause me to engage more in this type of emotional spending?”

• Pay attention to your feelings before, during and after spending.

• To learn more about the advantages of slowness, watch Carl Honoré’s TedTalk In Praise of Slowness.

4. Evaluate Your Purchase.

Now that you have slowed down and collected data on your emotional spending types and triggers, you can ask yourself the following reflective questions before making a purchase... 

• How do I feel right now?

• What is my motivation, true intention for making this purchase?

• Based on how I have felt in the past, how will I feel one month from now about this purchase?

• Is this an emotional spending behavior that I am trying to change?

After answering the reflective questions, you can evaluate your purchase further with the following logical questions…

• Do I already own this?

• What is the price per use of this item? 

• You are considering buying a $50 shirt. You will wear the shirt 5 times. The price of the shirt is $10 per use. 

• What is the cost per hour worked?

• You earn $20 an hour. You are considering buying a $100 video game. The video game will cost you 5 hours of your hard work (6 hours if you factor in income tax on your work and sales tax on the video game).

• Is this purchase worth the opportunity cost?

  • The opportunity cost is the next best thing you could purchase that you are giving up to make this purchase. For example, you can purchase a $250 plane ticket or the next best option. Maybe the next best option is Charlie XCX tickets. Maybe the next best option is paying down $250 of your credit card debt.

  • To learn more about opportunity costs, read Having Fun With Financial Trade-offs: 5 Common Types.

5. Consult a friend, family member, partner, or Certified Financial Therapist.

Ask someone to talk through the purchase with you. Inform them that they are not to tell you what to do but rather to help you think through the purchase (pros, cons, etc.). You are building the skill of critically thinking about your spending and your emotions. For many people, externally processing can bring clarity.

• Find a Certified Financial Therapist

6. Be Patient.

Emotional spending habits are exactly that - habits - and changing habits does not happen over night. Expect to take two steps forward, one step back, four steps forward, five steps back, and on and on. If you are committed to making a change though, you will make progress. Give it time - it will be worth it.