Are you an emotional spender? Spending may make you feel better for a moment, but it can spoil all your hard work keeping a budget throughout the year and make you spend more than you can afford. Luckily, there are ways to decrease your emotional spending and positively impact your bank account and emotional state.
Give your money a purpose
Allocate each dollar you make each month. Break it down by bills, holiday spending, savings goals, weekend activities, etc. If you give your money a purpose, it will be harder to overspend knowing that you would have to the funds away from a different purpose. By stopping to think and make this decision, you can reduce your impulse buying.
Use the 24-Hour Rule.
Wait a day to decide if you want to make the purchase. This gives you time to reset any emotions that cause you to spend. If you still want it the next day, go for it!
Create an account for extra costs.
Just like using a separate account for unexpected expenses that may come up, like repairs on your house or your car breaking down, use another account for fun, unforeseen extras with what you want to reward yourself. By putting a little bit away throughout the year, you won’t blow your budget when emotions kick in, and you want something.
Determine what you need and what you want.
Before you click “Pay Now,” ask yourself if you need this item or just want it. If your budget needs are met, you can make the purchase. But if another purpose requires the extra funds, you will want to reconsider hitting the checkout button.
Track your emotional spending.
Is there a pattern to when you emotionally spend? Are there triggers or particular feelings that come up? By tracking what is causing your emotional spending, you might be able to come up with other coping mechanisms to make you feel better.
If you have any questions on budgeting, our member specialists are here to help. Contact us today!