Conversations Around Money: Emotional Spending


You won't be surprised to read that emotions have a huge part to play in consumer behaviour.

In a 2017 UK study it was shown that on average 40% of purchases made are emotional with an additional 40% of habitual buys.

That means only 20% of the purchases we make are rational and considered choices.  20 percent!  So those things you buy after justifying and reasoning with yourself? Yeaaaah, they're probably still emotional rather than rational.  In fact, it's been proven that logic follows after emotions in the decision-making process, thanks to the evolutionary development of the brain.

I wonder which emotional states you identify as triggers for your spending.  Boredom?  Stress?  I know I sometimes panic buy through fear of items selling out or missing a good deal.  I shop when I'm feeling down as a way to boost my mood.  Heck, I even shop when I'm happy; in a state of elation trying to chase that shopper's high.

But when you think back to that 40% statistic, it's easy to see why emotional spending becomes an dangerous pastime.  And yes, shopping has become exactly that.  A pastime, a hobby, for many of us.  When really there are so many other valid things we could be doing rather than accumulating more 'stuff'.

If I'm going to be more mindful with my money then I need to be more mindful when I'm shopping.  I need to identify the underlying reason behind a purchase in order to reduce the emotional and increase the rational.

I need to remember to consider whether making that purchase will add value to my life, or just take me further away from reaching my financial goals.

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