Money Mindset: Understanding Emotional Spending & Ways To Overcome It - Mary Rigg Neighborhood Center (2024)

Previously, we busted 6 myths about budgeting and discussed the benefits to making a budget. While you may understand the importance of budgeting, you could still feel stuck because of how you feel about money.

We often have a very complicated relationship with money, as it can affect the way we feel about ourselves and how we spend (or don’t spend) it. Some of it has to do with how we were raised and how our family and friends handled money. Some of it has to do with the emotions we feel when handling our own money. Common negative feelings toward money include guilt, stress, jealousy, and shame. The way we make financial decisions because of our thoughts and feelings is called our money mindset.

But it’s not just how money makes us feel that’s important, but also what we do with money when we are at the height of emotion.

Emotions can influence our spending habits, leading to us to emotionally spend or impulse buy. Emotional spending happens at high times of emotion like stress and sadness as well as happiness and celebration. It is characterized by making purchases that someone does not really need and sometimes doesn’t want and often goes unused.

It may feel good in the moment, but after those initial positive feelings wear off, all that is left is less money and a feeling of dissatisfaction. It becomes especially problematic if it leads to spending more than you budget for or it puts you in debt. If you tend to be an emotional spender, there are things you can do to prevent yourself from pulling out your wallet when emotions are high.

• Trust Your Gut – One tip from Nikki, one of our money coaches here at Mary Rigg, is to trust your gut. “When you purchase something you don’t need, your body will actually let you know: a sick feeling in your stomach or warning sign in your brain. People usually ignore these signs.” Once you start recognizing the feeling, you can do better at thinking through the situation and make wise choices.
• Find Alternatives – If you use spending as a reward system, brainstorm a list of things that will feel like a treat but won’t cost you extra money or set money aside in your budget for rewards, so you are not sporadically spending.
• Take a pause – Another tip from Nikki is to take a pause: “If you want it, put it in your cart. Walk around the store for 10 minutes. Do you still want it? Did you even remember it was in your cart? Ask yourself “why do I want it?” and/or “how many hours would I have to work to buy this?”” This way you can think through the purchase without the emotions controlling the situation.
• If you are sad or anxious and spend money as a way to cope, it is important to address those feelings instead of avoiding them and then find ways to manage them in a healthy way. If it is becoming a habit, talk with a doctor about it. There might be a deeper reason for your spending.

Once you can recognize that you are an emotional spender, it becomes a lot easier to overcome the challenges that go along with it and you can start taking steps to managing emotions and money.

If you are interested in learning about ways to take control of your finances, check out our MoneyTalk summer workshop series and get registered below! To connect with a money coach call 317-639-6106 or clickhere.