Do You Want It, or Are You Sad? How Feelings Affect Finances

Laura McMullenOct 1, 2021

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When was the last time you made a sound decision while wiping away tears? Or shaking in fury? Or sweating with stress?

Your judgment was probably off during those emotional moments. Maybe you said something you later regretted — or got bangs.

Or maybe you tapped a targeted Instagram ad for a pricey sweater, which you bought and never wore.

Feelings influence decisions, including whether we should add to cart.

“Emotions and decision-making are very strongly connected,” says Kristy Archuleta, financial therapist and professor of financial planning at the University of Georgia in Athens. “Sometimes our emotions override our thinking process” and “flood our mind,” she adds.

To save money, please don’t enter your credit card information as you’re wading through that flood.

Feelings, finances and turbulent times

Making a logical, Spock-like decision is tough, particularly nowadays. The ongoing pandemic adds a “layer of stress" to our lives, Archuleta says.

As if more than 18 months of that stress weren’t enough — what’s that? — it’s the holiday season ringing your doorbell. As usual, the holidays show up sooner than expected and bring so, so much baggage.

Along with the holidays comes family and, again, complicated decisions about gathering or not during the pandemic. Or maybe this season brings loneliness and nostalgia. It can certainly trigger financial pressure.

The holidays can “intensify” our emotions, Archuleta says, and make it particularly difficult to “separate our thinking from our feelings.”

An example from Archuleta: Maybe you overspend on gifts, because you’re excited to finally see your family or to make up for missing gatherings last year.

Or perhaps you’re blue about not seeing family — or for any number of reasons. Down and depleted, you may order more and more stuff.

Uh oh, you're emotional shopping. Here's what to do

Before buying anything, try a “body scan,” says Natasha Knox, a Vancouver, Canada-based certified financial planner and certified financial behavior specialist, who’s also the principal of Alaphia Financial Wellness, which offers planning, coaching and education.

Starting with your feet and working your way up, she says, check in with how you're physically feeling. Are your palms sweaty? Are your shoulders tense? Are your eyes half-open as you stare at your phone?

How your body feels on the outside can indicate feelings on the inside. For example, maybe you’re despondent, enraged, exhausted or bored.

With that intel, Knox says, “you can ask yourself: ‘is buying this a great solution?’”

Would buying that sweater fix your boredom, for example, or would you be back to scrolling 30 seconds later?

Knox also suggests giving yourself a “24-hour cooling period.” Leave that item on the shelf for now. If you want to buy it tomorrow — and schlep back to the store — you’ll be in a better head space to do so.

Step away from online purchases, too, she says. Close the tab touting the perfect sweater that will fix all your problems right now. Sleep on the decision, and examine if you feel the same way tomorrow.

Better yet, Archuleta adds, use some of that time to reflect on when, where and how you’d use this purchase.

When you're not shopping, make a plan

Reflect on your last few impulse purchases. Examine what was going on around you, Archuleta says. For example, she adds, was it a hectic morning, soon after you got the kids out the door? Was shopping a tool to release that stress?

Try to identify themes in your environment and feelings. Maybe you often shop at night, when you’re exhausted. Or maybe you overspend on stuff for your kids when you’re feeling guilty.

Knox recommends also considering the retailer tactics that trigger you to overspend. Is it hard to pass up a two-for-one deal, for example? Or do you typically add a few more items to your cart to score free shipping?

This reflection isn’t meant to shame you about the past. Ideally, it empowers you to make more thoughtful shopping decisions in the future.

For example, Knox suggests using what you learned to create shopping principles for yourself.

Maybe you don’t shop online after 7 p.m., for example, or if you’ve been drinking. Perhaps you make a rule to never click on retailer emails (which is easier to do if you unsubscribe).

Or follow Archuleta’s classic decree: Always Make a Shopping List. If it’s not on the list, it’s not in your cart.

As you set these rules, also consider alternatives to spending to manage your emotions in the moment. If you’re stressed, for example, maybe calling a friend or family member would help, Archuleta says.

Knox also recommends determining why you’re making these principles and writing down those reasons. Think about what your life would be like a year from now if you’re able to better control your spending, she says, adding: “Ask yourself: “What good is going to come out of this?”

This article was written by NerdWallet and was originally published by The Associated Press.