All of us can struggle when it comes to making good money choices, even those of us who have high levels of education or naturally financially savvy. Our natural instincts come into play during these decision times.
Regardless of the transaction, whether you want to save for a pension, where to invest your money for a future passive income stream, or the mundane choice to buy a new pair of pants, these everyday decisions can impact your financial life. Your choice could spell the difference between a robust bank balance and monthly money problems.
Following your emotions can drive you to impulse-buying. In fact, all the advertisements, salespeople’s spiels, the social media algorithms all seem to be trying to exploit this emotional driver.
Have you ever innocently browsed online for something, only to discover a pop-up ad that will pester you from your browser the next day? How often did you compete with other shoppers to buy within that ‘limited time offer’ to purchase something with great urgency, only to end up with merchandise that you have no use for?
What is Emotional Spending?
Neuroscientists explain that our emotions are the central influencers in our decision-making process.
The buying factors that affect our (emotional) purchase decisions are highly personal such as love, sentiment, envy, pride, entertainment, and vanity. We will talk more about this later.
In an emotional purchase, the real need does not necessarily come into play in the first place. The emotions come from external sources, like influencers, that create the desire to buy.
So, you’ll see that these decisions will depend on impulses and unsolicited recommendations. There is usually an absence of a long-term need or an urgent situation that requires purchasing a product. The buyer does not look for information before buying and bypasses the evaluation of other choices. The buying decision relies only on emotional input.
Most products that people buy based on emotional triggers include products that we do not really need but somehow appear to be something we should have especially if you look at social media.
Emotional Purchases Triggers
Many times, it is the emotions that motivate a consumer to make certain product choices. When this happens, the consumer sets aside logic and practicality to make a buying decision. The emotional high that she feels is her overwhelming influence. You can say that the buyer develops an emotional affection towards the product that convinces her to do everything to claim it as her own. We will give you some examples.
It is true that every decision we make somehow involves emotions – even though we do not recognize them, such as subconscious feelings.
If you can understand what triggers these emotions, you can develop compelling marketing materials that will appeal to these triggers. We all have the same basic general mental triggers that move us to do things.
Marketing experts know that it is important to learn what those triggers are and how to position them, so they can elicit the desired response from the target market. In the following paragraphs, we will discuss the most popular emotional triggers that can go hand in hand with effective marketing activities.
Let’s face it: we all want the admiration and appreciation of people. We want others to respect us and we feel proud of our social status, activities, and achievements. That is why we protect our dignity, image and standing in the society at all cost. Some people purchase high-priced luxury items to prove something to themselves and others. Interestingly, this is one of the strongest buying motives.
Guilt is a feeling that comes to a person whenever he violates his internal standards.
For example, a dad who says he values his family but can’t help but work too much might feel guilty of valuing work over family. He might try to make up for his ‘offense’ by buying them expensive gifts or take them out to nice dinners or even on short, luxurious vacations.
People who often feel guilt can sometimes swing to altruism. On one extreme end, this altruistic tendency can drive them to share their abundance with others through charity. The bottom end is the unhealthy side where a person may spend everything on others and disregard his own needs.
Some people are need-validation shoppers, which means that they are looking for someone to validate their choices and decisions.
They are often doubtful and lack the self-confidence to make choices, so they struggle to make up their minds for fear that they will make the wrong choice.
These shoppers would listen to other people’s opinions and so-called ‘experts’ recommendations when they make their purchases.
Some people buy things out of fear, most of them imaginary. This explains the wide variety of marketing messages that touch on this angle: to use fear to move people to buy. Examples of this are product advertising for vitamins, supplements, health & wellness products, security gadgets, and accessories.
5. Fashion or Imitation
Fashion or imitation as a motive is the cousin of the motive of pride. People try to copy or imitate other prominent people like movie stars, athletes, etc. so that other people can identify them as ‘similar’ to the person they are imitating. Imitation happens when a person becomes so impressed with the dress, style, appearance, and other personal aspects like speaking, walking, etc. of another person.
This is the appeal to a person to be the very first ones to own or to try something. The marketing appeal targets the feeling of being a leader of the pack: “I was one of the first persons to have that kind of car, etc.”
Some people may joke that shopping is their therapy, but there’s really a seriousness to the statement. Buying things for yourself or for others can make us feel better and help us forget the blues, even for just a moment. But, it can create bigger problems such as additional credit card debts.
According to Harvard University researcher Jennifer Lerner and her colleagues, sadness makes a person impatient and willing to spend more. When a person is sad, he is likely to give up something larger and with a future benefit (like more money) to have a smaller benefit (a last-minute booking to a spa) right now.
This is entirely the opposite of delayed gratification, which is a sign of a high emotional quotient that enables a person to save money and build wealth.
Jealousy or envy is a strong feeling of showing fear or resentment towards other people due to their perceived superiority in a given field. The consumer can have the impression that another person is more intelligent, or wealthier, or more attractive, or healthier, or just better than him or her. This causes the consumer to purchase things to outdo the other person.
Trust in the brand or company is one of the hottest trends in marketing today. You can see that every company seems to be trying to use the trust angle in their marketing messages.
Consumers often decide to purchase a new product because it comes from a company or brand that they trust. For example, it took some time for American consumers to trust car brands from Japan and Korea – they still went back to their American brands.
Most people do not want to be left out or be alone. It’s in our nature to want to feel to be a member of a group, and consumers often purchase products that will make them feel they are part of a specific group. Many companies take advantage of this desire to belong by incorporating it in their marketing messages like: “We’re your family”, “You’re a part of this family”, etc.
Humans are creatures of habit. Habits, once ingrained in the routine of life, becomes very difficult to break. In marketing, once something becomes a habit, it becomes a person’s basic need.
So, there are products whose saleability stems from the habits of the consumers. These are products like cigarettes, coffee, tea, sodas, specific style, color or brand of clothes, or subscriptions to magazines or services such as Netflix. The habits act as a stimulus that moves the consumer to purchase a certain kind of product or service. Improving your spending habits is a key step in order to get out of debt.
Consumers in some age levels always want to feel cool or trendy and up-to-date with what’s going on around them. Appealing to this emotion is common in marketing with callouts like: “Don’t miss what people are raving about!”
13. Attraction Towards The Opposite Sex
This appears to be the strongest of all human motives of all time. Men want to be attractive to women and women want to be attractive to men. This is a potent motive for buyers: the more a product can make them attractive, the more appealing the product becomes. You can see this through the popularity of products like perfumes, deodorants, makeups, shampoos, sunglasses, bags, shoes, and beauty services like salons, nail and body spas, weight-loss treatments.
Ways to Control Emotional Spending
There’s nothing wrong with buying things, per se. It’s okay to buy nice things for yourself from time to time – if they are within your budget.
But if you’re using your money for non-necessities and spending more than what you can afford such that your credit card debts are in critical levels, stop and think. You should perhaps learn to recognize your tendency to spend based on emotions and try to curb that bad practice.
For many people, totally avoiding emotional spending immediately may not be a realistic goal but there are some steps you can take to lessen the harm it can do to your bank account.
After you’ve honestly confronted the feelings that go behind your spending, the next critical step is to identify the external influences that force you to take out your wallet every time you hear a sales pitch. Maybe, the pull is so strong that just going around the malls or browsing online creates a compulsion to buy. Then it’s the right time to reevaluate those triggers and see how you can lessen your exposure time.
The first step is to cut down the opportunity to make yourself vulnerable to the temptation to spend. If your Waterloo is the mall, just visit once or twice a year, or don’t go at all but go online instead. If online shopping or TV shopping is the problem, find something to replace it, like a new activity to take up your time like learning to play the guitar.
Opt Out of Advertisements
Be intentional in limiting your exposure to advertising.
The less you know of what’s available to buy, the less likely you are to feel a “need” to have that item.
Unsubscribe to mailing lists of promotional companies or your favorite store so you won’t have to receive their product catalogs. To avoid internet ads while browsing, download a program that blocks and prevents advertisements from appearing on your computer.
Be Aware of Your Habits
The mere acknowledgments of the emotions that push you to spend is already a giant step. U
nderstanding why you feel the need to buy while you’re feeling a certain emotion is going to help you zero in on the root cause.
Hopefully, by knowing the root of the problem, you can address it there and stop the bad habit altogether.
Pause and let the moment pass. Take a time out and breathe. If you can make it past the initial urge, the temptation wouldn’t be as great afterward. Set a deadline (a week or a month) to determine whether you really need or want the thing. If you still want it after that time, save up for it first. Just don’t go and spend like crazy for something just because you feel you need it now.
Make a budget
If you’re on a budget (and sticking to it), you have a perfect reason to resist spending money unnecessarily. It’s not in the budget, that means you can’t buy it.
Work with your calendar to plot out the special occasions where you might need to allow some money for.
So, come your birthday, you can enjoy it without losing your shirt. If you love to celebrate and want to be ready for those sudden ‘this-calls-for-a-celebration’ moments, set aside $50-$100 in a Celebration Fund. This way, if you need to do some celebrating, you’ll have money waiting.
Don’t Save Your Credit Card Information on Websites
Online shopping is easy, fast and convenient and it becomes even more for repeat purchases. It would not be a breeze if, every time you were to buy something, you had to pull out your card and type all the information on the computer before you can click “buy”.
Sometimes, that extra 5 minutes you need to key in your name, address, and contact details is enough time to deliberate on whether the purchase is necessary or not.
Are You an Emotional Spender?
Stress from work, a stormy relationship with your spouse or even debt problems could drive you on a course for a retail therapy session – or even two. A lot of experts agree that retail therapy can help because it boosts your mood and might even lessen the anxiety.
However, any type of shopping excursion prompted by emotions can quickly turn into a problem.
When you start spending beyond your means and buying things you don’t need, you may be fueling a shopping addiction instead.
Watch out for these warning signs of an oncoming emotional spending spree.
But you should remember that anything excessive could lead to problems – including shopping. When you are spending beyond your means and uncontrollably buying things you don’t even need, that could be a sign of shopping addiction. So, look out for the following signs of an impending emotional shopping safari.
Seeking Immediate Gratification
When you are under high stress, worried, restless, or irritable, there is a tendency to look for pleasure or satisfaction to escape these negative feelings. Shopping becomes a false and temporary way out of the situation.
Buying After The Paycheck
Check yourself: when you get your paycheck, do you immediately get an urge to spend? Maybe you get a sudden compulsion to go to the mall or to dine out or to simply buy something for yourself or your loved ones. What’s really happening is you’re trying to spend on material things to ‘buy’ happiness.
Justifying The Purchase With ‘I deserve it.’
If you need to convince yourself that you’ve earned the right to splurge on something may be a sign that you need to give your self-esteem a check-up. Yes, you need to spend money to take care of yourself, but the impulse to spend haphazardly may have some emotional roots.
Not Use The Things You Bought
What usually happens is that you buy all sorts of things and you feel good while buying them. In reality, you don’t even bother to seriously think if you actually need them now; you convince yourself that you will need them later. Look around your house and in your closets and you will see items that you’ve never used or even things you forgot that you even own.
Shopping to Decompress From The Stress
People react to stress in different forms. Some turn to food, others to alcohol, others go out of town, others party the whole night, but emotional spenders go shopping. If this is your default reaction to stress and you find yourself in a stressful situation, avoid the mall and online stores like a plague so that you can look for a healthier alternative to cope with stress.