Emotional spending can ruin even the best budget. If you have spent time and effort putting together a logical budget to keep your financial life on track, it would be a shame to blow it by spending money on an emotional basis. It isn’t always easy to avoid emotional spending. But, you need to be disciplined if you want to see your financial goals realized down the line.
What is emotional spending? Any purchase you make which is based more on your emotions in the moment than on logic and reasoning can fall into this category. For instance, if you are sad or upset about something negative in your life, you might go shopping to make yourself feel better. Or, if you are excited about an event or other occasion, you may spend a lot of money when you are caught up in the thrill of the moment. Either way, spending your money in this manner will make it difficult to stay within your monthly budget.
To help you steer clear of emotional spending, we have compiled three tips below for avoiding this budgeting pitfall.
1. Wait a Day
This is a classic piece of financial advice. If you are thinking about purchasing something with a significant price tag, it is a good idea to wait a day or two before actually spending the money. This will help you to avoid buying on emotion or impulse.
If you wait a couple days and still think that the purchase is a good idea, it may be smart to fit it into your budget. However, there is a good chance that you will decide to save the money after you step back from the situation. It may be helpful to set a personal limit for spur-of-the-moment purchases. For instance, you could decide that you have to wait an extra day before buying anything which costs more than $100.
2. Ask a Friend
Sometimes, the best thing you can do when trying to make a financial decision is to consult a friend. If you are unsure as to whether or not you should buy a certain item, check in with one or two of your closest friends for advice. The ultimate decision will still be up to you. But, getting help is a smart way to see the purchase from a new perspective. If your friend seems to think that you would be spending too much money for the item, it may be worth second thought. It can also provide you with some extra accountability for your spending.
3. Try Other Forms of Therapy
If you are thinking about going shopping because you need something to lift your mood, try other options first. For instance, you could go for a nice walk in a pretty location to get out and clear your head. Or, you could schedule some exercise with a group of friend. Try taking a jog or going for a bike ride. Whatever your personal preference happens to be, doing something outdoors and active can be a great way to shake off your negative mood. When all is said and done, you may find that you are no longer in need of ‘retail therapy’.
Have you ever dealt with emotional spending? How did you avoid it?
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