Emotional spending is a habit that people should stay away from if they are serious about saving some money for the future.
Before the pandemic shook the entire globe, people were obsessed with online shopping and became addicted to its never-ending yet tempting offers. The e-commerce industry was cashing on the recurring shopping behavior of consumers, why wouldn’t they? The cash inflow was regular, the job market was flourishing and nobody anticipated a catastrophe that was coming.
Enter coronavirus which crippled the economy and movement of movement in a jiffy but the show had to go on.
What Is Emotional Spending?
Spending that is done based on your feelings instead of necessity or logic is called emotional spending. The examples are plenty; a pair of new shoes with your name, earphones that you want to buy in spite of dozens, which are still lying in your cupboard, t-shirts, gizmos the list is endless.
Take a look at the above spending you really don’t need them but still, the urge to buy them is what emotional spending is all about. Buying just for the sake of it are the initial signs of a bigger problem in the making.
Credit Card: An influencer Of Emotional Spending
The right to spend becomes impulsive when you have backing from something like a credit card. Shopping with a credit card might look very easy and comfortable because you have already bought the item of your choice only to be paid later. However, nothing comes free of cost, when you buy something you have bought the debt as well.
The consequences of emotional spending through a credit card are:
- Unnecessary usage of cash
- Addition of debt
- Zero Savings
Look at the irony, for instance, let’s take a shopping offer that says you save 20% on the actual price of a product, what are they referring to? You’re paying the money with the credit card, the product is purchased, you are happy for buying it for a discount thinking it was a smart move. What did you get? Nothing but more debt, the seller made money and you ended with no savings!
Blaming the seller is not right; he is doing his business targeting those who need it, who were planning to get one for a long time. Mind you, nobody is going to pat your back for spending on something that you never thought of and got added to your list because the offer was inviting.
Remember, emotional spending is to be treated at the mind level!
Post-Pandemic Impact On Spending
Following the restrictions being imposed on the citizens from traveling or setting foot outside the house, online shopping remains the lifeline of people until the pandemic ends. With limited access to nearby groceries, shops, daily utilities, and supermarkets, ordering items online saves time, prevents contracting the virus, and is safe too.
The offerings by online delivery services are jumping in to make the most of the current situation and as consumers, we need to be wary of not falling prey to the discounts and offers thrown at us. Spending judiciously is the order of the day to survive the economic recession.
A Risky Business
Emotional spending is like having a sweet tooth, you never stop craving for more sugar, finally end up being a diabetic, and of course frequent visits to the dentist as well. Excessive spending leads to huge debts, poor or zero savings, and more.
Even worse is when you find out your spouse was hiding all the receipts, purchases, and overspending resulting in unnecessary debts. As you dig deeper it can infuriate your partner and quickly create anger, distrust, and end the marriage or relationship.
Emotional spending has a tendency to create more complications between relationships at the emotional level as it involves finances which is crucial to keep your life ticking.
Spending starts off with usual expenses like paying for daily utilities, groceries, etc. and the bulk of your income might be targeted towards clearing loans, mortgages, and so on. Let’s assume if your daily expenses can be taken care of by a payment app then it just takes off some burden but the larger part of the expenses and the need to make some savings still remains.
A simple equation is to stick to your guns and stop your emotions taking over your spending habit which automatically balances the inflow of money vs. your spending ultimately making way for some savings.
Express your emotions but not your spending!
By Karthick V.