Emotional spending is totally a thing! When you make a purchase to ease your emotions – whether it’d be sadness or achievement – it is considered to be emotional spending, which is ultimately a form of impulse spending. All in all, these purchases are in-the-moment decisions and could possibly be outside your budget, leading to some very cash-strapped weeks or months down the line depending on the size of the purchase or purchases.
If you have a tendency of making last-minute, emotional purchases, you’re not the only one sin. Roughly half of the consumers admitted to buying products to boost their mood. And, the price tag isn’t cheap – each emotional purchase costs around 115 dollars on average! So, if you were to make one emotional purchase each month, you’d tack on nearly 1,400 dollars to your annual spending.
Not only could this put a dent in your savings or retirement accounts, but it could also lead you to lose out on future investment opportunities, such as purchasing your own home. To begin to adjust your emotional spending habits, follow these 3 guidelines to curb your bad habit!
Figure Out Your Emotional Triggers.
First, pinpoint your triggers to emotional spending. Next time that you’re out shopping or you’re browsing online, simply ask yourself, “Why am I shopping right now?” Maybe, it’s necessary, like a seasonal wardrobe update, or perhaps, you are guilty of browsing for an adrenaline rush. Purchasing a new pair of shoes may put a smile on your face now, but it could impair your financial goals later on.
Delete Shopping Apps and Email Newsletters.
The next step is to eliminate temptations. Yes, unfortunately, this means you should most likely delete your favorite shopping app(s), unsubscribe from email newsletters with discounts, and avoid any other incentives that could entice you to shop when it’s unnecessary. You don’t have to do the work manually, either! It can be as simple as unsubscribing to all your promotional emails with the click of a button!
Have Weekly Money Meetings Concerning Your Budget.
Set a time aside each week to go over your finances. Add this meeting with yourself to your smartphone calendar and hold yourself accountable. To make things easy, consider downloading an app, like Mint, to help you track spending from all areas of your life and unearth where you’re overspending. If your goals aren’t where you want them to be, take notes on how you could improve and go from there!
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