Learn how your emotions can impact your spending habits.
Shopping when you are emotional tends to wreak havoc on your budget. When you?re flying high or feeling extremely blue, budget numbers may seem like a trifling nuisance. Rationalizing excuses to spend money becomes easier, especially when you ?know? you deserve the shopping trip or that helping someone will cheer you right up. Here are some tips to help you recognize if you are spending money for emotional reasons and break the habit.
- Spending money helps you feel more equal, accepted and less bored: three wrong reasons to spend. You should seek personal fulfillment in ways that do not involve shopping or spending money. Many people take pleasure in the novelty of an object, or the item boosts their self-esteem because they finally own what all the neighbors do. And the neighbors seem so happy, with their shiny new cars or clothes. Whether the neighbors are happy or not, your happiness does need to start from within. A fancy motorcycle or car helps only in the short term, if at all, and is more likely to make you miserable in the long term by adding to your money woes. Instead, join clubs, start going to a gym, volunteer or find activities to give you a sense of inner purpose, happiness and peace.
- Spending money on loved ones makes you feel needed and helpful. For example, if a relative needs money for a car or house, you?re happy to spend the money, and what?s wrong with that? In some cases, nothing. In other cases, however, if you?re spending money you do not have, it?s a problem. And even if you have the money, helping out loved ones may also create (or have created) a pattern of dependence. It happens because your loved ones never fully realize their potential or become invested enough in their possessions and lives because you function as a safety net.
To avoid emotional purchases, bypass impulse purchases over a certain amount, and establish rules about carrying cash versus credit cards most of the time.