Emotional Spending and How to Stop It
Collaborative Post
If you think you’re spending too much and you panic at the thought of checking your bank app, you aren’t alone. You might be aware that you are spending too much, but you may not necessarily realize why you’re spending money as fast as you make it and how to change your spending habits.
In this blog post, we will talk about ways to change your spending habits.
Emotional Spending
One of the most debated questions around spending money on possessions is why we keep on doing it. Well-known financial author Dave Ramsey says:
“We buy things we don't need with money we don't have to impress people we don't like.”
While we do often buy things we don’t need, we also buy a lot of things we do need. What Ramsey is talking about here is purchasing excessive products that don’t add any practical benefit to our lives but rather elevate our social status or to get approval from other people.
This is just one reason why we overspend, another reason we overspend money is to get rid of money because having money doesn’t feel safe.
Sometimes having money money means having more responsibility and having to deal with people who ask us for financial support, which puts us in a position where we have to set financial boundaries and risk rejection from doing so.
The first step to understanding your spending habits, is to get to know your bank account - look at it often and track your spending habits and start to understand what drives your spending habits.
Luckily, getting finances in check is a lot easier today than it was a few years ago since most banks offer free financial services and banking apps while specialized apps have also been created.
In addition, there are many comparison sites around these days, so you don’t need to be an expert to workout the meaning of HDB loan Vs. bank loan, the multitude of different insurance policies or even where you can get better food shopping deals.
The act of buying things has been proven to have a rather significant effect on the brain both positive and negative and this usually occurs when we are in a vulnerable position.
People often misuse their money to alleviate feelings of boredom, loneliness and even jealousy.
These are all highly emotional states and spending money when in these frames of mind causes the brain to associate the act of buying things as a solution to them. This is exactly how drugs work when taking them to feel better about yourself and forget your troubles.
Self-awareness and emotional intelligence
Just like any emotionally addictive substance, the first step to ridding yourself of the problem is to admit that you have a problem in the first place.
Most people who spend more money than they make, find themselves in debt, yet they keep on spending to feel better about it, which leads to more debt, trapping them in a vicious cycle.
The first step to getting out of debt and changing our spending habits is to admit that there is a problem.
By acknowledging the problem you can start to find the solution. Bring yourself to look at your bank balance, identify the problems and consciously acknowledge that the expenditures are there and that they are real.
Once you become consciously aware of your expenses, you can sit with the emotions and sensations in your body and even start exploring your state of mind when spending money.
Look at your expenses and try to remember what state you were in when you made the purchases.
It could be food that you ordered, an expensive watch that you purchased, or a new subscription service, whatever it was - figure out what key emotions drive your spending habits and then sit with those emotions and find where they come from and start to heal the root cause of these emotions or work on healthy ways to deal with your triggers.
Moving Forward to a Better Future
Moving on from the denial and realization phase, you can focus on some mastering certain tools (I have a simple 30 second tool I teach in the Bank Account Challenge) that can help you stop yourself from spending more in the first place so that you can begin your journey to financial, and more importantly, spiritual freedom.
Buying things is a part of life, and money is important since we all need it to live. You won’t stop buying things in the future; if you do actually need the product or service, then fine, go ahead and buy it.
The aim isn’t to deny ourselves of our wants and needs, it’s to change our spending habits so we don’t buy things on a whim or just because we have money.
The ultimate is to feel comfortable or relaxed when we have money in the bank.
The best thing you can do is to let yourself calm down before purchasing something so you can really think about it, and remember this - If you think you might regret it or you feel some type of way about the purchase, then don’t do it.
How do you feel about your spending habits and/or your bank account at the moment?
Share your thoughts in the comments section below.
