The Psychology of Money: How Emotions Impact Spending

The Psychology of Money: How Emotions Impact Spending

1. Money = Emotions, Not Just Math

• Money is tied to our identity, security, upbringing, and even self-worth.

• We often spend based on how we feel, not what we need.

“We don’t buy things with money—we buy them with hours of our life.”
— Vicki Robin, Your Money or Your Life

2. Emotional Triggers That Drive Spending

😩 Stress Spending

• Retail therapy feels good in the moment but can lead to guilt later.

• Common after bad days, breakups, work burnout.

🏆 Reward Spending

• “I deserve this” after hard work, dieting, or success.

• Problem? It becomes a default reward system.

📱 FOMO + Social Media

• Seeing friends’ vacations or luxury items can trigger spending to “keep up.”

• Remember: You’re comparing your behind the scenes to someone else’s highlight reel.

🧒 Childhood Money Messages

• Were you taught “money doesn’t grow on trees” or “spend it while you have it”?

• These early beliefs shape adult behavior—often subconsciously.

3. Common Money Mindsets (a.k.a. Money Scripts)

→ None are “bad,” but understanding your dominant script helps you rewrite it.

4. How to Control Emotional Spending

✍️ Practice “Pause + Reflect”

• Before a purchase, ask:

  • “Do I want this, or do I need it?”

  • “Am I feeling emotional right now?”

  • “Will I still want this in 24 hours?”

📓 Track Emotional Purchases

• Keep a journal or note in your phone.

• Over time, you’ll spot patterns (e.g. always buying after stressful meetings or late at night).

🧘 Practice Mindful Spending

• Align purchases with your values, not your impulses.

• Example: Instead of buying random stuff, spend on things that bring lasting joy or growth (travel, education, experiences).

5. Build a “Guilt-Free Spending Plan”

• Allocate a small % of your budget for fun or splurges.

• Knowing you can spend without guilt reduces impulsive overspending.

6. Celebrate Progress (Not Just Results)

• Financial wins aren’t just about reaching a goal.

• Celebrate:

  • Saying no to an impulse buy

  • Hitting a weekly budget

  • Checking your bank account without anxiety

7. Replace the Dopamine

• Shopping = dopamine hit.

• Replace that habit with free or lower-cost joy boosts:

  • Go for a walk

  • Listen to music

  • Text a friend

  • Journal your win of the day

🌱 Final Thought:

Getting better with money isn’t just about numbers—it’s about healing your relationship with it.