Compulsive buying otherwise known as impulsive spending is a behaviour that can be influenced by mental health, personality and adverse childhood experiences. People may spend impulsively because they feel it is comforting and distracted from negative experiences. It can be considered similar to binge eating, where food is used to comfort.
Impulsive spending occurs when the person spends spontaneously, struggles to manage their thoughts including behavioural biases and emotions and is seduced by marketing including social media. Impulsive spending is usually not planned, sudden without the consideration of consequences. The benefits is usually temporary with feelings of guilt and regret afterwards. The person does not need the item but wants to have it without considering the negative consequences. Positive consequences for impulsive spending behaviour may include a high feeling, comfort, improved identity and improved mood.
While impulsive spending can have positive consequences they are short lives and overcome with negative consequences that can be damaging and lasting. Negative consequences include problems with relationships, financial hardship, negative effects on mental health and low self-esteem. However, the consequences may not be fully acknowledged as the thoughts of spending is pervasive.
Impulsive spending is an external coping strategy. Therefore internal locus of control can manage the behaviour. Cognitive behaviour therapy, and acceptance commitment therapy are treatment options available. Thinking about long-term goals, distress tolerance, reviewing your relationship with money, healing from childhood adversity, and reflecting on what you want to buy can help with impulsive spending. Financial literacy and reviewing your budget can also help improve money management and spending behaviour. Moreover, healthier coping strategies can also alleviate spending behaviour. While these strategies sound easy, it can be challenging for the person to manage the behaviour, however with time, support, trust and patience it can be done.
A financial goal can seem futile to reach and often competes with your life and needs as it is today. However continuing to shift your awareness to your goals and setting your goals appropriately can help.
You have a financial goal which may include saving for a mortgage, improving your emergency fund or buying a car. However, your financial goal may seem too far away, especially if it is to increase your retirement fund. So, how do you increase your motivation to save? Saving may mean reducing spending on things you enjoy such as eating takeaway, reducing subscriptions and reducing costs on entertainment. Your thoughts may stop you from reducing costs as it may seem that your quality of life today is more important that the future. Another unhelpful thought may be that you probably won't live beyond tomorrow or 65 so why bother.
Sitting with your negative unhelpful thoughts is a strategy you can use. Also being aware of your emotions while you apply your strategy to reach your goals will also help. While it can be easier to say rather than do, shifting your awareness back to your goals when you have the urge or thought to spend is important.
Chunk your big goal into smaller ones. Give yourself a reward when you reach each smaller goal. As long as there reward is not another expense. Prepare a vision board of your big goal to keep reflecting and remembering on what you need. Remind yourself why you set that goal up. Focus on your needs first before what you want to prioritise. Sometimes you may need support to go through these processes and talk about why it is so difficult. If you need more help to manage your emotions, motivation and thoughts in a safe non-judgemental environment, then we can help through financial therapy sessions.
The information provided above is not financial advice but intended for general information only. If you need help with improving your financial literacy and support to improve your financial behaviour and mental health, contact us today. For specific financial advice you can reach out to a financial planner.