Stay away from your wallet when you feel sad, mad or guilty.
Grocery shopping while hungry can cause you to spend more than you otherwise would.
That is also true of emotions like sadness, anger and guilt, according to personal finance columnist Liz Weston. Fear and thankfulness, on the other hand, could help curb spending.
Sadness can lead to overspending because shopping can temporarily alleviate the emotion. A 2008 study titled “Misery Is Not Miserly” found sadness makes us willing to part with more money for a purchase, hurting our ability to delay gratification.
Thankfulness works the opposite way, enabling our ability to delay gratification by offsetting our tendency to discount the value of future rewards.
“So next time you’re struck by the urge to spend money or dip into your savings, take a moment and list at least 10 things that make you feel grateful. You may well decide that you have more than enough.”
Anger can hurt your finances by leading you to take bigger risks and making you stubborn, so you dig in your heels. Meanwhile, fear causes you to exaggerate risks.
Guilt is associated with altruism, with sharing one’s wealth — possibly too much.
Weston says this is where setting limits can help: “We can keep ourselves from going overboard by creating budgets for spending that can’t be influenced by guilt, such as holiday presents,” she writes.
Do you find emotions affect your spending habits? Which feelings wreak the most havoc on your budget? Share a comment below or on Facebook.