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It’s not an uncommon practice in America to go shopping when stress becomes too overwhelming. There’s even a colloquialism for it — “retail therapy.” But while shopping can provide a short-term emotional boost for some, that high eventually wears off. And for those whose finances were in turmoil before their impromptu shopping trip, it can cause some real damage.
Sadly, 50% of millennials in a recent survey by LendingTree admitted that emotional spending — “retail therapy” — has hurt their financial well-being. And it’s not just millennials — 49% of Gen Zers are in the same boat, along with 44% of those in all age groups.
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Whether you’re a millennial or not, here are some ways that you can get your finances back on track if your emotional spending is causing financial problems.
An emergency fund — one that covers things like unexpected car maintenance and medical bills — should be the cornerstone of your financial plan. But if you have a propensity to spend when you get emotionally or financially stressed, building a secondary “spending fund” might be a good idea.
This way, if you give in to your indulgences, you can draw from this fund without damaging your overall finances.
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A common suggestion for those who are subject to impulse buys is to wait 24 hours before spending a certain amount of money. If something catches your eye that is more than, say, $50, you make a pact with yourself to delay the purchase for at least 24 hours.
Oftentimes, waiting a day is enough to diffuse the impulse, and you’ll find out by the next day that you don’t really “need” or even want the item.
Marketing has become a true art form in today’s society. You may not even realize how many targeted ads reach your eyes and ears every single day, cajoling you to spend your hard-earned money. Ad research has gotten so sophisticated that it’s highly likely that the majority of ads you see are actually things you might be interested in buying.
Under that type of bombardment, it takes a resolute shopper indeed to resist all of the temptation. The best thing to do is detach yourself from the system as much as possible. Unsubscribe from mailing lists and stop giving your information to companies or websites that can sell it to marketers. Most of all, avoid searching shopping sites, as they are trained to show you products that you’re most likely to buy.
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