If you’ve ever opened a shopping app after a stressful day at work, had a conversation that didn’t go as planned, or you received bad news – you’re not alone. Shopping after experiencing difficult emotions is more common than you might think. But if clicking check out on your online shopping cart temporarily gives you a rush of excitement and is then quickly replaced with financial consequences and feelings of regret – you’re most likely engaging in emotional spending. Let’s learn what emotional spending is, why we do it, and how to overcome it.

What is Emotional Spending?

Emotional spending (sometimes nicknamed “retail therapy”) refers to purchases that are driven by emotions rather than your need for the product or service. It’s different from typical discretionary spending, like when you buy the new golf clubs you’ve been planning to buy and that you’ve budgeted for. In this state, shopping is a way to relieve feelings like stress or loneliness.

Emotional spending isn’t always a large purchase. It can be frequent, small purchases in grocery checkout lines or even late at night. It can look like ordering takeout after a long day, even when you already have groceries at home. It can be impulsively purchasing everything in your Amazon cart because it will make you feel better, even if you know you can’t afford it. Emotional spending does not always begin as a problematic habit – it’s a common behavior that can have serious financial and emotional consequences if it becomes one.

Signs of Emotional Spending

• The impulse to go shopping comes after experiencing an emotion like stress or boredom.
• You feel a short-lived sense of relief after making the purchase, which is later replaced by guilt or regret.
• Your spending has caused you to accrue debt, deplete your savings, negatively impact your credit score, or worse.
• Spending causes conflict with family, friends, or significant others.
• You continue to repeat the pattern, even though you are aware it has had a negative impact on your financial health.

What Causes Emotional Spending?

Research has shown that shopping makes people feel good – every aspect of the transaction from browsing, to imagining, to finally owning the product. According to the Cleveland Clinic, this is because shopping releases “happy hormones” that encourage us to keep engaging in the same behavior. We feel temporary relief after shopping, so we keep doing it.

How to Overcome Emotional Spending

1. Track Your Patterns and Address Them

Do you know what gives you the urge to buy things? Maybe you notice a pattern of shopping after a difficult day at work or you reward yourself after reaching a goal.

Consider using a journal or app to track when the urge to spend arises and what caused it. By addressing the root cause of the spending, you are more equipped to recognize  a pattern and redirect your focus.

2. Implement a Spending Rule

Consider hitting pause before buying the item. Give yourself a set time to wait before making an unplanned purchase, or longer for bigger purchases.

During this waiting period, ask yourself a few questions:

• Do I really need to make this purchase or am I shopping to relieve the emotion I’m feeling right now?
• Does this purchase fit into my budget?

When the time is up, you may discover that you don’t need the purchase. Your desire to  buy the item might even disappear completely.

3. Set a Discretionary Spending Limit

If your budget allows for it, set aside some “fun money” you can use for wants. By deciding how much you can comfortably afford to spend, you can shop without feeling guilt or regret.

Need to create a budget? Check out our fillable budget worksheet to calculate what you might have left to spend after your total monthly expenses.

4. Set Financial Goals

Having clear, meaningful financial goals can make you think twice about buying something you don’t need. When your money has a purpose, you might be more likely to reconsider non-essential purchases – because that money can get you closer to reaching one of your goals.

5. Find Alternative Activities to Handle Emotions

Both negative and positive emotions can lead to overspending. When those emotions arise, try replacing shopping with another more productive activity.

Breaking the habit of emotional spending can feel overwhelming, even if you recognize the negative consequences it has on your daily life. However, breaking the cycle can help you experience improved financial well-being.

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