This week I enjoyed being a guest on Texas Credit Union League's internet radio show were I discussed emotional spending with co-hosts Rick Grady and Todd Mark. Click here if you'd like to listen (it's about 1 hour long) or you can download it to listen later.
In addition to having a lot of fun with Rick of Texas Credit Union League and Todd of Consumer Credit Counseling Service, here are some of the items we discussed:
People and organizations in the Smart Zone have control over their emotions and are able to better manage the impulsivity that leads to overspending. Smart Zone communities create a high trust environment that is free from suspicion and blame.
Why do emotions fuel excessive spending?
Emotional spending occurs when you buy something you don't need, or even really want, as a result of feeling stressed out, bored, under-appreciated, incompetent, unhappy, or any number of other emotions. In fact, we even spend emotionally when we're happy. For example, I bet you bought yourself something the last time you got a raise.
When does emotional spending occur?
It occurs when we are trying to:
- Improve or maintain a mood. We think by looking forward to our new purchase we will feel happier. “I will be so happy wearing these new shoes!” Initially when we buy something we DO feel better and this can condition us that to feel better we need to buy something.
- Cope with stress. Spending is used to self-soothe and help you feel calm but it can actually backfire on you and, as I say, it can fill your bucket.
- Deal with loneliness. We think buying something will help fill the void in our life.
- Improve self esteem. We think our purchase will make us a better person or look better to others.
- Avoid impulse purchases.
- Limit your temptation. For example, if the mall tempts you then find another way to enjoy an afternoon. If you are tempted to buy more when hanging around a certain friend or relative then try to find less expensive things to do with them (like going for a walk, cooking dinner or drinking coffee).
- Don’t shop when you are feeling emotional. If you are feeling bummed out at home don’t get on the internet and go shopping, for example.
For some people, shopping is much more than a pastime - it's actually an addiction called oniomania. While it may not seem like a dangerous addiction, many of the psychological characteristics of compulsive shopping are identical to those of chemical dependency.
What are characteristics of extreme emotional spending?
- Buying more than you can afford
- Getting a rush when you make a purchase and then feeling anxiety and guilt later
- Going on a shopping binge where you way overspend
- Taking a second job to accommodate your out-of-control spending
- Having items around the house you never use that still have price tags on them
- Fights with your spouse over your spending