We’ve all been there. Fighting, or giving in to the urge of spending when stressed. And though retail therapy never fails to deliver, this feeling of satisfaction and excitement is undeniably short-lived.
Unless you’re earning more money than you spend, then indulging is a sweet treat. For most people, however, that’s hardly the case.
How do you cope with stress? And, more importantly, what triggers your impulsive spending habits?
A study from the Journal of Marketing Research on The Effect of Stress on Consumer Saving and Spending conducted six experiments on stressors and found different reactions on savings and spending from participants.
In cases where participants were stressed but felt like they were in control, they opted to save money or spend on necessities.
In the fifth experiment, manipulating the cause of the stress such as having a new job led the individuals to buy what would otherwise be nonessential items such as new and expensive office clothes.
The last experiment found that “people [perceive] that saving is less important when they receive information that suggests they cannot restore control.”
“In summary, we predict that stress leads to a loss of control and triggers strategies designed to restore control,” the study notes. “As a result, stress will increase [the] consumers’ willingness to save money when they have the option of saving vs. spending it on products.”
The experiment also found that the effect of stress on consumer spending should be moderated under the following conditions:
- When they perceive a low or high level of control
- Experience stress that renders certain products necessities when they would otherwise be non-necessities, or
- Are led to believe that efforts to restore control are likely to fail.
These factors are already being used in marketing to influence consumers’ buying behavior.
How to avoid overspending
It’s not only stress that affects your spending. Emotions play a huge part in your everyday life. In this case, feeling excited (cue the Christmas songs at the mall), hungry, or insecure, affects your spending habits.
The next time you feel like you’d go on an emotional shopping spree, experts suggest limiting your exposure to these triggers.
“If it’s the mall, plan to visit only a couple times a year, or try shopping online instead,” Investopedia advises. “If online shopping is the problem, find other, non-shopping websites to occupy your time, or replace some of your internet time with another activity.
“If you always find yourself spending more when a particular friend or relative is around, try to schedule free or inexpensive activities with that person, like getting coffee, cooking dinner, or going for a walk.”
Being more mindful and taking accountability for your actions will help save you a lot of money. Take control by noticing your reactive behavior and changing the way you cope with stress.
Splurging every once in a while is good, but it’s not worth all the struggle to pay huge bills or getting stuck in debt for what could have been a controllable emotional spending episode.