In today’s ever-more connected and consumeristic world, the business of persuasion is booming. The global advertising industry is worth $352 billion in 2021, and despite being over a century old, continues to grow at a confident 3% per year, according to IBIS World.
One of the reasons why the ad industry is so valuable is its role in using emotion to make people spend. If a company wants its product to sell, a slick ad campaign is often the only standing in the way of bumper sales. Now, that’s great for businesses, but for everyday people, understanding these emotions is crucial when wishing to budget and save. So, what exactly triggers emotional spending, and how can you control it?
What is emotional spending?
Emotional spending is when our emotions compel us to buy something. Typically, this means forgetting about comparing purchase options, searching for deals, or even considering whether we can properly afford the purchase or should indeed spend money on it.
In essence, it’s about impulse. We see something, it sparks emotion. And then we purchase based entirely off that single emotional input. That’s why, typically, these sorts of purchases sit at the lower end of the pricing spectrum and are often products we don’t particularly need in our day-to-day lives.
What can trigger emotional spending?
There are lots of situations that can trigger emotional spending, such as:
- Envy: On social media, you see an influencer advertising a product. You feel envious of their sparkly lifestyle, so buy the product to own a slither of the experience. This can also happen if you feel envious of someone you know, so spend to ‘keep up’.
- Sadness: You’ve had a bad day and see an advert or packaging that implies a product will give you a good time and cheer you up, so you buy it. The concept of ‘retail therapy’ is heavily reliant on this sort of emotional response.
- Excitement: After buying a product or service, you are excited for it to arrive or the experience to happen. At this point, you are offered another product, which you buy as it promises to continue the excitement or ramp it up further.
- Stress: While feeling stressed, you are offered a product that promises it will make your life easier. You do, and it does, as separately, the act of buying gives you a feeling of control.
- Guilt: An advert or product makes you feel guilty for not treating people you know in a similar way (such as an advert involving a parent and child, or friends and family), so you spend in a similar way.
How can you control emotional spending?
To stop your spending from being controlled by emotional triggers, you need to organise your finances smartly.
First, by making use of tools like prepaid cards, you can put money aside for discretionary spending and limit your outgoings in kind. This is beneficial if you’re the type of person that rarely, or puts off, looking at their bank balance, or has a ‘may as well’ attitude to credit card usage.
Next, you need to work out what your own personal emotional triggers are. Think about times recently when you have bought something you didn’t need or couldn’t afford. What was happening at the same time? What was going through your mind?
And lastly, when purchasing things, always quiz yourself on whether you need to buy them, how you feel in the moment, why you want the item, whether the spending can wait, and whether you can afford it.