Why we spend so much - the emotional side to spending money and how we can get trapped

Now we're into December, we start to field the barrage of advertisements in readiness for Christmas. The sharing of gifts is a great way to show those closest to you that you care about them and it’s all too easy to get wrapped up in the excitement of glitzy presents and the latest must-have gadgets. However, according to the Citizen Advice Bureau, they helped an astonishing 350,000 people to get to grips with their debt last year alone. While excessive spending is not the only reason people end up in debt, it can be a contributory factor.

Psychologists have been studying the emotions that we feel when we buy things and have found that people tend to fit into two distinct groups. Those of us who like spending and those of us who don’t. It’s as simple as that. They then looked at the spending habits of those who spend more, to evaluate the effect that their spending habits had on their happiness.

For many, the act of buying things makes them feel good. It releases feelings of excitement, exhilaration – euphoria even. As with many other addictive behaviours, these feelings can be short-lived - especially if you can’t really afford what you’re spending money on - only to be replaced with a sense of guilt, shame or disappointment.

Tell-tale signs that you might be an emotional spender

• Regularly buying the things you like, rather than what you need because of the buzz you get.
• Often buying gifts for others, for no reason.
• Basing your purchasing decisions on how you feel at that time, i.e. you’re in a good mood so treat yourself, or conversely, you feel fed up so buy something to heighten your mood.

If you can relate to these signs, getting a grip on your emotional spending needn’t be difficult, if you follow these three golden rules:

1. Don’t buy on impulse (even if it’s in the sale)!
2. If you didn’t set out to buy the item in question, chances are you really don’t need it. Make a deal with yourself to sleep on any impulse purchasing decisions. It’s not easy, but soon becomes second nature.
3. Set yourself some thinking time for major purchases. Larger purchases (cars, TVs, technology) require more than an overnight review period. After a week or two of research, you can then analyse if the purchase is right for you and be able to ascertain the very best price.

Use cash as a rule – and debit cards as a fall back

The physical act of drawing money out from the bank is often enough for you to really consider your purchase. It makes the purchasing act ‘real’. For larger purchases, where you feel uncomfortable carrying cash, choose debit over credit so it leaves your account straight away.

Give yourself an impulse budget

Build some ‘me’ money into your household budget. That way if you see an absolute bargain that can’t be left on the shelf, you can make the purchase safe in the knowledge that it won’t be at the detriment of your finances. Pick an amount you feel comfortable with, then you’ll feel able to say ‘yes’ to spontaneous splurges – and the emotions it unleashes – without the associated guilt!

Remember, in some cases, emotional spending can become more than a bad habit and move onto a serious addiction. If you regularly choose shopping over spending time with your friends and family, or you feel irritable or agitated when unable to shop it could be time to review your habits and get some support. 

First Psychology Scotland has experienced practitioners who can work with you on understanding your reasons for spending and help you change your relationship to buying.