Are your emotions getting you into debt?

By Marianne Curphey


Life-changing, emotional events, such as relationship breakups, workplace promotions, the death of a loved one or childbirth, can trigger people to spend more than usual.

While both positive and negative emotions push us to splurge, more people spend most when feeling unhappy.

According to a survey by Asda Money, 19 million Brits spent £26.5bn on credit cards in 2016 after experiencing breakups (1.8 million respondents), starting retirement (1.9 million) and taking bereavement (2.4 million). And 34% of emotional spenders get in financial difficulty after these spending sprees.

"Credit card spending provides immediate gratification from buying something," Maggie Baker, psychologist, financial therapist and author of Crazy About Money, said in an emailed response to questions. "Spenders revel in the anticipation of feeling excited and pleased. As neuroscience has taught us, the anticipation of a pleasurable event is nearly as powerful as the pleasurable event itself."

"We know that spending is an emotional regulator, so people who are addicted to spending or shop when they feel low are spending money to regulate emotions," says Simonne Gnessen, founder of Wise Monkey Financial Coaching. "There is a high, and then buyers' remorse when you come down with a bit of a crash if you're spending money you can't afford."

The low lasts a lot longer than the high, Gnessen says.

How to break the cycle

  • Become aware of your own behaviour.
    What triggers your emotional spending?

    "It's important to recognise what the emotion is," says Gnessen. "There is a gap between the stimulus and the time you respond, so if you've had a hard week and the first thing you find yourself doing is going shopping, then it's becoming aware of what you are doing."

  • Find alternatives.
    Gnessen suggests asking yourself what else you might like to do besides shop. Some alternative actions to spending include finding a hobby, so you become absorbed and engrossed in an activity that you find rewarding.

    Other people find keeping a journal useful. Writing down feelings "helps take you out of the moment of bad feeling and gives perspective," said Baker.

  • Prepare for the feelings.
    Gnessen also suggests planning for an emotional trigger the same way you might have a plan in place for an emergency.

    "Prepare alternative activities that you can do when feelings arrive that could lead to problem spending," Gnessen said.

    If you find yourself in an emotional situation with no alternatives prepared, "You need to accept what you are feeling, become aware of it, don't try and avoid it," Baker said.

    "Call or meet a friend and talk about how you are feeling. When people experience negative feelings they often wrongly feel that they are alone and other people aren't suffering in the same way."

  • Get physical.
    Baker suggests doing something physical to literally shake you out of your spending mood.

    "Go for a walk, go to the gym or do anything that gets you moving," she said. "It helps put your situation in perspective and helps you realize that in the big picture you are in a good situation.

    "Or if your situation is really bad, it will give you time to think out a strategy for dealing with it, like setting up a payment plan."

Ways to combat the emotional debt
There are ways to help repair the damage of spending splurges.

For example, ensure you pay back your balance in full each month to reduce fees and interest charges. If the balance is beyond your means to pay back quickly, you could switch to a 0% balance transfer credit card to repay the debt over a few months without incurring interest.

Another alternative is to choose a cash back or rewards credit card that at least gives you something back for the purchases you make.

"Having the strategies in place and planning for the obstacles is always part of the success in dealing with problems," Gnessen says.

See related: 'Clear Your Clutter Day' creator says decluttering can improve your finances, well being, How your debt, mental health issues are related

Updated: 6 April 2017