Finance

Money: Being an Emotionally Competent Spender

Being an Emotionally Competent Spender | www.TheHeavyPurse.com

When I was thirteen years old, my dream was to own a pair of Dittos jeans. Back then, they were a must-have item in my Southern California Junior High School. When my father surprised me with some money to buy clothes for the school year, I happily went to the mall to try on a pair of Dittos. They were everything a young girl wanted.

But I didn’t buy them. Even though I desperately wanted them and could afford them, I could still remember a few years ago when money was tighter, so I decided to be practical. With great sorrow, I put the Dittos back on the shelf and bought three pairs of cheaper jeans.

It’s been a decision I’ve always regretted.

A frugal person would argue I made the right choice—three jeans for the price of one pair of designer jeans is a smart purchase.

I don’t disagree.

It is a smart purchase but wasn’t the right one for me. I made a quick decision based on memories of my mom diligently saving so she could buy me a pair of shorts that I accidentally ripped the next day playing with friends. My mom was incredibly gracious and understanding, but I still knew it had financial ramifications for her. Even though years had gone by and things were better, the memories of silently worrying about money still held so much power over me that I chose being practical over something I loved and could afford.

I let fear rule my emotions and did not slow down to think about what was really important to me. And yes, what was really important to me was a pair of Dittos jeans that I loved over owning three pairs of jeans that I never liked. It may seem shallow to care about a pair designer jeans so much, but I was thirteen and fitting in was important to me. But even more importantly, had I taken the time to slow down and weigh my options, I would have realized one new pair of jeans that I loved was the better and more cost-effective option. Volume is not always the better deal.

My Father’s Greatest Lesson: Money is Emotional

My father taught me many things about money, but my biggest take-away was that money is emotional. Anyone can be taught how money works, but true financial freedom comes from understanding what drives your emotional response to spend or not spend your money.

What Causes You to Spend Money?

Whether you are currently in debt, a reformed debtor or have never been in debt, you need to understand how your emotions can affect your spending habits.

You might be surprised to see how much purchasing power anger, frustration, fear, heartache and boredom have these days. We use emotions to justify purchases that we believe we’ve “earned”. Other times, we have a reason to celebrate, but old fears resurface so instead of treating ourselves to something we truly want (and can afford), we settle for something less, which gives us little joy and is often a waste of money.

Does any of this sound familiar? In many instances, emotional spending is the root cause of most debt. Thanks to easy access to credit cards, we try to buy happiness, instead of dealing with whatever is affecting us.

Take a look at the list again and see which emotions cause you to spend. These are your triggers. You want to become familiar with them, so the next time you find yourself pulling out your credit card, you can stop and ask yourself what you’re really feeling before you make another emotional purchase.

Financial Literacy and Emotional Competence

Financial literacy and emotional competence go hand-in-hand. When you are financially literate, you understand the role emotions play in your financial life and do not allow them to drive your spending habits. You slow down and look at the options within your price range and weigh them against what is most important to you. The best way I know to do this is to align your money decisions with your values and goals, and I will share how I do that in my next post.

And those Dittos jeans? It took a year of working and saving my money, but I finally bought them. While I regret not purchasing them with the money my father gave me, I did learn a valuable lesson. Now when I’m at the store with my girls, we always slow down together and carefully weigh our options to make sure we make the best choice possible.

What was something you regretted buying or not buying? What are some of your emotional triggers?

Shannon

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April 8, 2013  •  31 Comments  •  Finance

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  1. Monday, April 8th, 2013
    I was an emotional shopper in my former life (in my 20s) I shopped because I worked weird hours 2-10pm and I was lonely and bored the rest of the time =/
    • Monday, April 8th, 2013
      I think boredom is actually one of the biggest emotional triggers. These days it's so easy to go online and shop away your boredom. Before you know it - your shopping cart is overloaded and your credit card is getting a huge workout!
  2. Monday, April 8th, 2013
    Shannon, this SO reminds me of a story from my own childhood. I was in the 8th grade, we were dirt poor. My mom granted us a generous budget (for our situation) of $50 for the year for all of our clothing needs, and told me I could spend it how I wanted to. My dream had been to own a pair of Nikes - I just wanted one thing that would make me feel like I fit in. I found a pair: light blue with a white stripe. They were $28, leaving me another $22 for my clothing needs for the rest of the year, but I bought them anyway. To this day, I'm SO glad I did. Even though the reasons for wanting them (to fit in) may have been wrong, those shoes did wonders for a broken-hearted teen's self-esteem. Well worth every penny.
    • Monday, April 8th, 2013
      I understand completely!! I think it's very important to figure out matters to you and not worry about what other people think -- even if it's a pair of Nikes or a pair of Dittos jeans. :) I bet you cherished your Nikes and wearing them made you stand a little taller and feel better about yourself - and those are important things too.
  3. Monday, April 8th, 2013
    When I was in junior high, it was Bongo and Guess jeans. I couldn't afford to buy them at the time, but I always remember how it felt to not have them. Junior high is unfortunately, about trying to fit in. I guess it's a "girl thing" when it comes to jeans! :)
    • Monday, April 8th, 2013
      We girls do have to look good and I think that really starts to affect us in Junior High. It's when we really starting noticing brands and paying attention to who wears what. It's definitely a hard balance. Clothing is just "dressing" and what's inside IS what matters. But realistically, how we feel about our outside affects our inside too.
  4. Monday, April 8th, 2013
    "but true financial freedom comes from understanding what drives your emotional response to spend or not spend your money." I could not agree more Shannon! That is such a vital lesson to learn, especially as you're growing up. When you learn to separate those emotions from your money you're much more likely to find success in my opinion.
    • Monday, April 8th, 2013
      Thanks John! We think alike! People need to understand the emotions that cause them to spend because even if they eliminate their debt now - they will still have to fight falling into bad habits if they are unaware of the emotions that cause them to spend. Most of us can't flip a switch and change a behavior and that includes spending. But if we're aware of our emotions, we have a much stronger chance at long-term success.
  5. Monday, April 8th, 2013
    Great call Shannon! Ask yourself what your trigger is in order to be mindful and in control of your behavior. Really fantastic and enlightening...
    • Monday, April 8th, 2013
      Thanks, Tony! So many people don't realize they are emotional shoppers, but once they realize it - it becomes so much easier to stop yourself from making needless purchases.
  6. Monday, April 8th, 2013
    "Take a look around your home and pick out ten items you regret purchasing." I can't come up with 10 but one that stands out the I so regret purchasing is our sofa. Not only do I regret the money we spent on it, but it is the most uncomfortable sofa I've ever had. It looked so nice in the store, but it hurts my neck and back so much. And from a financial perspective I regret it because it did cost a lot and we will never re-coop that money.
    • Monday, April 8th, 2013
      It's tough when you regret something big and expensive like a sofa. They way stores set up storerooms make everything look so lovely, but sometimes the reality is quite different! Hopefully when it comes time to replace it - you can maybe sell it and get a little money back! :)
  7. Monday, April 8th, 2013
    Love this Shannon. So true! I especially love what you said that volume doesn't always mean it's a better purchase. As far as my own spending, I'm really I've come as far as I have when it comes to emotional spending! PS, a great pair of jeans is totally worth the price. :)
    • Monday, April 8th, 2013
      Thanks, Tonya! Many people make the mistake that volume is always better. Sometimes it truly is. But those 3 pairs of jeans were a waste of money for me. I'm glad you've made strides with your own emotional spending. It makes a huge difference. And yes - a great pair of jeans is worth the price. A flattering cut is priceless. :)
  8. Monday, April 8th, 2013
    Great post Shannon! Fear is an incredible emotional trigger that produces some really silly decisions in our lives. I still have to fight the "emotional spender syndrome" from time to time. I love to shop and it's especially tempting to go for that feel-good rush the new purchase brings when I get down about something in life.
    • Monday, April 8th, 2013
      Thanks, Brian! I would never want to get rid of my emotions, but they sure make us do some irrational things at times, including spending money on things we don't even want or can't afford! It's very easy to justify purchases, which is why I always have to take a moment before I buy things to make sure I'm buying it for the right reasons.
  9. Monday, April 8th, 2013
    I think if you have your heart set on something and it's not an impulse buy, you will be disappointed with something less expensive but not what you wanted. It's hard to find the balance between being frugal vs having what we want. I still struggle with that.
    • Tuesday, April 9th, 2013
      I agree, Kim. It's one of the hardest things for people to balance. It's okay to spend money on things you really love - even if you don't need it - the trick is making you sure you can afford it or saving your money to buy it so there is no guilt afterwards.
  10. Justin
    Tuesday, April 9th, 2013
    I don't know that I'm an emotional spender, but I do talk myself into making some stupid mistakes.
    About six years ago, before netflix and all of those cable alternatives, I thought that cable was too expensive. I bought DVD sets of two shows that I loved, watched them once, and that was it. In the end it was more expensive than cable and I don't have any use for them now.
    • Tuesday, April 9th, 2013
      We do talk ourselves into making some poor decisions by convincing ourselves at the moment it's a smart choice! DVDs can be tricky. In theory, we think we're getting a bargain, but I suspect a lot of DVDs get watched once (sometimes never) and then collect a lot of dust. :)
  11. Tuesday, April 9th, 2013
    Loved this post! I agree, and understand your feeling, of regret about passing on the pair of jeans you really wanted. I've found that when the frugal mindset is deeply rooted it can be hard to validate spending money, even when you specifically saved for an item/experience.
    • Tuesday, April 9th, 2013
      Thanks, Erin! You're so right! We often think about the dangers of overspending, but becoming fearful of money really isn't much better. There has to be a nice balance where you're spending your money wisely and enjoying life without creating debt.
  12. Tuesday, April 9th, 2013
    Hey Shannon,

    I can relate to your story because it was embedded in my brain to not spend money on things that we couldn't afford.

    As I got older although I continued to be very budget conscious, if I decided I wanted a more expensive item of clothing I didn't hold back. I bought it anyway because I would wear that until it couldn't be worn anymore. Yep, I would literally wear it out.

    I'm not an emotional spender and there is nothing here in my house that I regret buying. Actually, there is plenty more that I would love to get and I have every intention of one day doing just that too.

    Thanks for your lesson and an important one it is too.

    ~Adrienne

    ~Adrienne
    • Wednesday, April 10th, 2013
      Thanks for stopping by, Adrienne. That's wonderful you are not an emotional shopper - very few of you exist! :) I like to buy high quality clothes too. They may be more expensive but they last longer, which I appreciate!! I'm not a celebrity, so I can be seen in the same outfit more than once! :) There definitely is a balance people need to find where they are able to enjoy the money they have without guilt while still living within their means and not creating new debt chasing after things they don't want. You want something, but can't afford. No problem. Make it a goal and save your money until you can buy it outright. It was feel wonderful!
  13. Tuesday, April 9th, 2013
    I don't think I am or was much of an emotional spender, but I can completely relate to your story. There have been quite a few things that I bought for cheap, thinking I got for a steal, until you strip that screwdriver on that first turn and you realize, you gotta go run out and get another one. The only regret I had, was I didn't learn my lesson until I bought a few cheapos, each one slightly more expensive than the rest. It's not easy being cheap :).
    • Wednesday, April 10th, 2013
      I hear you, Anthony! I love a good bargain too, but sometimes it's easy to confuse bargain and cheap! I know some people who covet something expensive and think they can't have that so they buy something cheaper. But they don't like it. So they replace it. Again and again until they could have bought the original item. If you want something out of your price range - then save your money to buy the real deal. It will be worth it!
  14. Saturday, February 15th, 2014
    I have a confession Shannon. I was a bargain shopper for so long that I started spending too much on "deals." I knew I had to do something to control it, so I started my blog! It kept me off the deal sites and reminded me of my goals and what was really important to me. It has worked and I still enjoy sharing money-saving ideas. So my blog saved me!
    • Shannon
      Saturday, February 15th, 2014
      Yeah, for blogs! It's true thought sometimes we get addicted to "deals" that we end up spending more money than we planned. They definitely know how to market and appeals to our senses. I'm glad you're blog "saved" you and always gave you the chance to help out others.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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