Notes on emotional spending

Published: July 22, 2016 at 10:22 am

Emotional spending refers to the instinctive disbursal of money and time at the cost of physical and/or financial health. Decisions are made in order to “feel better” without thinking about consequences.

Without sitting in judgement on whether this is a good or bad, here are some thoughts on the subject.

It is fashionable to say that stress has increased “these days”. Instant gratification has increased. Things were better in the “good old days”. Excuse me for disagreeing with that. I would bet that folks have been making the same observation for centuries.

Human life has always been stressful. For centuries man has spent much of his daily wages at a tavern at the end of hard days work – in the field, in a factory or as an investor banker or information technologist.

Instant gratification was always the norm even before any saving or investing was even possible. Before youtube, before the internet, before television and even before books were printed, there were plenty of ways of entertaining oneself in healthy and unhealthy ways. There were also plenty of ways to blow money without thought and enough people who did just that.


Nothing has changed aside from an increase in population which has led to more ways and means to spend.

eggs
Credit: Bernard Goldbach

How to handle emotional spending?

Advice is so easy to dispense with, especially by clueless folk. There are a lot of 10 ways and  15 ways to reduce emotional spending or stress spending posts out there.

I can tell you from experience that when subject to stress, when feeling anguished, the spending is a form of release and is hard to resist. In my case, it was not money being spent, but my health.

I have always had a problem with being 10-15 Kilos overweight and a problem with stress eating. I would end up eating crappy food as a release.

Four years ago, I had lost a good 25 Kgs and was in the prime of my youth and fitness when it was all taken away by an auto-immune disorder.

The despair from that, combined with drugs  that increase hunger resulted in more instant gratification and weight gain.

It is only when my health improved, I could realise the error in my ways and started losing weight again, first by stopping stress-eating and then by portion control.

The point of this monologue is that, unless the root cause is treated, instant gratification, be it spending or eating is hard to control.

If we are spending more because of a stressful life, then we need to focus on reducing that. However, many of us are often too stressed to realise that decisions are being made without enough thought behind them.

Emotional releases are healthy and necessary. The means adopted should not cause long-term harm. That is the key. In order to realise this, we need to pause and introspect. That often happens with a lucky break. The lucky break itself happens only when stress reduces! The vicious circle has to be broken.

What do you think? Have you seen people engage in emotional spending? Share your thoughts on how this can be handled.

Do share if you found this useful

Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video!  More than 700 investors and advisors use this!
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 2600 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 600 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
My new book for kids: “Chinchu gets a superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both boy and girl version covers of Chinchu gets a superpower.
Most investor problems can be traced to a lack of informed decision making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, if we had to groom one ability in our children that is key not only to money management and investing but for any aspect of life, what would it be? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parent’s plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Did you know? We have more than 1000+ videos on YouTube to explore! Join our YouTube Community!

Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored three print books, You can be rich too with goal-based investing (CNBC TV18), Gamechanger, Chinchu Gets a Superpower! and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements, write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps