Overspending? It could be your emotions

Written by Rebecca O'Connor on 1st February 2017

Feeling a bit emo today? Don’t we all. But what you need to do right now is STEP AWAY FROM THE CREDIT CARD.

That’s because sometimes, when we feel a bit down, when some bad news knocks us or our self confidence takes a hit, we spend.

giphy (5)

You don’t have to be suffering from diagnosed depression to start a problematic association with spending and mood inflation.

According to ASDA Money, Brits are spending £26.5 billion on their credit cards when triggered by events such as break ups, promotions, retirement and a death. It said that “Blow out spends mainly go towards holidays but also include tattoo and piercing sprees.”

Worryingly, the research identified that 34% of emotional spenders end up in financial difficulty following spending sprees (however an encouraging 22% have since overcome it).

As the link between our emotions, our brains and our money becomes increasingly interesting to researchers (here’s an extract from a book all about it) and financial providers, it should also start to benefit our understanding of our own relationships with spending and saving – and fingers crossed, help us to identify ways to break the habits.

So let’s start with the obvious:

  • Spending doesn’t make you happy. At least, it might for the very short term, before feelings of unfulfillment creep back in and you are looking for the next thing
  • Spending on things you don’t need is a habit. Like smoking or drinking in some ways.
  • Your worth is not related to how much you own
  • A little bit of careful spending can be nice, when you can afford the thing you are buying
  • There’s a whole load more important stuff to do with your money than spend it (see SAVE, below)

Tips on using credit more sensibly

Tattoos on credit? Come on people. It’s a bit funny that this research came from a credit card provider, but in fairness, the following tips from ASDA Money on how to use credit more wisely are realistic, if we are to accept that spending on credit in some form is a fact of life:

Karen Harkin, Head of Asda Credit Card, said: “Millions of people use a credit card, and we believe that it is valuable tool for everyday life. However, it is essential for shoppers to understand how their card works and how to best capitalise on the benefits it offers. With this knowledge they will be better equipped to spend responsibly and will feel empowered seeing the card work for them as they reap their rewards.

4 tips from ASDA Money for spending on cards:

  • Understanding that with cashback cards you reap rewards every time you use it. So whilst we’re not encouraging you to spend more than you need to, do make sure you use it whenever you can to maximise the benefits, BUT-
  • The key to avoiding problems from using a credit card is to get into the habit of paying off your balance in full, by the due date each month. This way, you can avoid paying unnecessary interest, which is how the debts tend to creep up.
  • If you are looking to take out a cashback credit card, it’s important to shop around and get one which suits your shopping habits, so that the rewards really benefit your personal needs.
  • If you have multiple credit cards, assign different cards to specific purchases, such as one for online shopping, and one for holidays. With online shopping for example, one of the risks is fraud. By using a single credit card for online purchases makes it easier to spot fraudulent activity, so you can get it sorted as quickly as possible and limit any damage.

… Or save it instead?

How about getting off the emotional rollercoaster of spending-guilt-low mood-spending-guilt, etc.. and feeling like this instead:

giphy (6)

Because what would REALLY make you feel better, on grey, mizzly days, such as this, would be to know that you’ve got a fat wad of savings stashed away.

Sadly, not only are we getting a bit excessive with the spending, we’re also failing to save, too. The average person says they need £83,542 in their savings pot by 2022 to achieve key life goals, according to Munnypot, a new low cost financial advice service. But, with the average Brit saving less than £200 a month, we’re facing a typical shortfall of £50,000.

We’ve written a post on how to save more this year, here.

Read it, and stop weeping.

NB. Personally speaking, one way I motivate myself to save and invest is by investing in sustainable and ethical funds. This is because if I know my money is doing good for the wider world as well as doing my future savings balance a favour, it makes me more inclined to put that money aside. That’s just me. But if you are interested in this approach, take a look at our investments posts for ideas. 

If you are struggling with debt or depression linked to your finances, please don’t suffer in silence. Mind, the mental health charity, understands the link between the two and can help. The number is 0300 1233393.