By: Salem Nyati
Emotional spending often stems from spur-of-the-moment joy or a sense of lack, where individuals try to fill that void. While it might offer a brief emotional boost, this behaviour can ultimately backfire, harming personal finances, relationships, and overall well-being.
Emotional spending can sometimes be referred to as retail therapy and is not always a bad thing. While the desire to feel some sense of control over your life is understandable – the only thing that disappears during retail therapy is your money, adding that emotional spending behaviour is one of the primary reasons people dig themselves deeper into proverbial financial graves.
Learning to self-regulate is a valuable skill that a mental health specialist can help develop. Similarly, a dependable financial adviser can provide the guidance to recognise emotion-driven financial decisions and help you stay on track with your financial goals.
Having access to professional financial advice is self-care; it goes beyond just tracking your spending, as you are securing your financial future by learning the skills to empower you to make smarter money choices. Whether it's planning for retirement, saving for a major purchase, or simply ensuring you have the means to handle unexpected expenses, you are preparing yourself for life's financial challenges and opportunities.
Emotions can serve as powerful triggers that drive our spending behaviours. Powerful because our heightened emotional state of happiness or sadness can breed impulsive buying behaviour. Stop and think, rationally before you waste your savings and investments on trivial pursuits such as entertainment or items you don’t need.
The new year presents an opportunity to learn to do things differently, beginning with assessing our emotional state, before making any purchases; ensuring that the decision to spend money on anything is fuelled by rational thinking.
What you do with your money on a regular basis, and the decisions you make with it matter when it comes to your financial well-being. In this case, consulting a professional financial adviser is not just about making ends meet but about maximising your financial potential.
Here are tips for making wise, non-emotionally driven purchases in 2025:
- Implement the ‘24-hour rule’ for non-essential purchases. Give yourself a day to reflect on whether you truly need the item or if this really is just your momentary emotional response.
- Keep a journal of your spending habits and note the emotions you feel before making purchases. Recognising patterns such as stress, boredom, or sadness can help you address the root cause rather than turning to shop for relief.
- Create specific and achievable financial goals such as saving for a holiday, paying off debt, or building an emergency fund. Regularly remind yourself of these goals to stay focused and motivated to spend wisely.
- Allocate a small portion of your budget to guilt-free spending on things you enjoy. This allows you to satisfy the urge to treat yourself without derailing your finances.
* Nyati is a consumer financial education specialist at Momentum Group.
PERSONAL FINANCE