'Retail therapy' not a myth -- we spend when emotional

By Marianne Curphey

Think about the last time you went shopping for no particular reason. Perhaps it was a sunny Saturday afternoon, maybe just after hearing some excellent news. Or maybe it was a rainy, cold day, and you had just been through a breakup. Whether you're fuelling your good disposition or aiming to make yourself feel better, your mood has more impact on your spending than you may think. But there are ways to fight the urge to splurge.

Four out of five Brits questioned in a TopCashback study said mood affects their spending habits, and that they are more likely to spend when they are feeling happy. That doesn't mean we don't shop when we're sad, though - about half the respondents said they succumb to retail therapy when they are feeling low.mood-affects-spending

Other factors play a part too: if shop staff is friendly and the sun is shining then we are more likely to get our wallets out, according to the study. Boredom and location come into play, as well as self-esteem and impulsiveness.

Karen Pine, professor of developmental psychology at the University of Hertfordshire, says that feelings about money are tied deeply to mood and how people feel about themselves.

Simonne Gnessen, founder of Wise Monkey Financial Coaching, agrees.

"As humans, we need to maintain our mental and physical wellbeing, and shopping is one way that we can do that," she says.

Whether you're in good spirits -- perhaps celebrating the completion of a big project or a pay raise -- or a foul mood, shopping is often the outlet we use to express our emotions, she says.

"It provides momentary pleasure, which can cause us long-term financial pain," Gnessen says.

Spending more than usual on holiday is also a common psychological phenomenon.

"On holiday we adopt a different form of mental accounting," Gnessen explains. "It is a different country and a different state of mind, and we feel that the normal rules don't apply."

Question yourself before you spend
We need to find other ways to reward ourselves, says Gnessen. She suggests that you:

1. Be aware of the triggers that make you spend. Do you have an itch to buy something each payday or head to the shops when you fight with your spouse? Figure out the factors that lead you to pull out the plastic.

2. Ask yourself if you really need whatever you're buying. Are those shoes you're eyeing similar to a pair already in your closet? Do you really need a tablet if you already have a smartphone? Think about how practical your purchase is and how often you see yourself using it before you use your card.

3. Take only cash if you think you might be tempted to overspend. It's OK to reward yourself for getting a raise, as long as you don't go overboard. Leaving your cards at home will limit you to an appropriately priced reward.

4. Develop alternative hobbies to shopping, such as going for a run.

5. If you shop when you are bored, find something else to do that inspires you. Try learning a new skill or language instead of looking through the clothes racks.

6. Don't shop when you are angry, emotional, frustrated or hungry.

See related: Living without a credit card, To improve finances, create a better mindset

Published: 15 April 2014