Many people develop an addiction as a way to cope with their emotions. This is the same for people with a shopping addiction. Compulsive shopping and spending may be a way for you to avoid or mask negative and uncomfortable feelings, such as sadness, boredom, stress and anxiety.
A 'spending trigger' is a feeling or situation that makes it easy for you to break your spending rules. For some people, it can be feeling stressed or bored, while others want to buy things their friends have got. Make a list to help you understand what triggers your impulse to spend.
Compulsive buying disorder is tightly associated with excessive or poorly managed urges related to the purchase of the items and spending of currency in any form; digital, mobile, credit or cash. Four phases have been identified in compulsive buying: anticipation, preparation, shopping, and spending.
A person with OCD focused on a fear of spending money will have unwanted intrusive thoughts, urges, or worries about spending money and any outcomes they may associate with it. These are considered “obsessions” and they can cause great distress.
What is the 50/30/20 rule? According to this rule, you must categorise your after-tax income into three broad categories: 50% for your needs, 30% for your wants and 20% for your savings. This way, you set aside a fixed amount from your income for each of the categories.
Lifestyle creep, often referred to as lifestyle inflation, is a common financial phenomenon that occurs when individuals or households experience an increase in income and subsequently increase their spending habits, particularly on non-essential items.
Money dysmorphia refers to a distorted view of a person's financial situation and wellbeing. Put plainly, it causes individuals to feel anxiety about money and may cause them to1: Hoard the money they have. Worry about money when they don't need to. Constantly comparing their finances to others'
Spending as affective coping is operationalized as a spending behavior used to avoid or decrease negative affect. Spending as social coping is operationalized as a spending behavior employed to mitigate social pain and increase social connection.
Mental health can affect the way you deal with money
If you're feeling low or depressed, you may lack motivation to manage your finances. It might not feel worth trying. Spending may give you a brief high, so you might overspend to feel better.
Impulsive shopping in addition to having an emotional content can be triggered by several factors, including: the store environment, life satisfaction, self-esteem, and the emotional state of the consumer at that time (Gogoi and Shillong, 2020).
Let's recap what we've learned so far: ADHD traits like impulsivity and time struggles can lead to overspending. Acting on impulse and focusing on immediate rewards often makes it challenging to save or plan for long-term goals. Dopamine plays a significant role in impulsive spending for people with ADHD.
Emotional Spending: Many people use shopping as a way to cope with emotions like stress, sadness, or even boredom. This can lead to impulsive purchases that strain your budget. Social Influence: Peer pressure and societal expectations can drive you to spend money to fit in or keep up with others.
Spending money can feel like a thrill. When we buy something, our brains release a chemical called dopamine. This "feel-good" chemical makes shopping a joyous experience.
Adverse childhood experiences and childhood trauma are associated with increased risk of impulse spending in adulthood via elevated general impulsivity and emotion dysregulation.
Compulsive shopping episodes may be brought on as a way to cope with difficult emotions. Psychological distress, anxiety, depression or low self-esteem, can drive people to find comfort in shopping. The temporary euphoria that comes from making a purchase can serve as an escape from negative feelings.
Gen Z is more likely to spend money on subscriptions, from meal kits to Spotify. There's also the trend of “doom spending”, which is purchasing non-essential items to cope with either personal or wider political issues.
In the Dark Psychology of Money: The Good, The Bad, and The Evil, Dexter Morgan takes you on a journey where stakes are high, morals are corrupted, and integrity has no ground to stand on. It is a dark and evil world. From the outside, we judge and mock, assuming we would never fall into that lifestyle.
The impact is greatest among younger generations, with 43% of Gen Z and 41% of millennials affected. Of those experiencing money dysmorphia, 82% said they feel behind on their finances. Gen Z and millennials, however, aren't necessarily falling behind in their finances compared to their peers (FIGURE 1).
Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.
Commonly referred to as “lifestyle creep,” the tendency to spend more as you make more can have long-term consequences for your overall financial security. In other words, as your income increases, it can be easy to “creep” toward spending more.
What is it called when you spend more as you earn more?
Lifestyle creep, or lifestyle inflation, is overspending after your income increases. For example, if you get a new job that gives you $20,000 more per year in take-home pay but decide to buy a (non-essential) car for $30,000, you'll have more debt than before your raise.
