The Psychology of Spending
Our emotional urges are breaking the bank.
Ever bought something you didn’t need… just because it was on sale? Or you went on a shopping spree just to lift your mood. You're not alone. Many of our financial decisions aren’t logical — they’re emotional. Understanding the psychology behind spending helps you regain control.
What Is It?
The psychology of spending refers to the emotional and psychological triggers that influence how and why we spend money. Retail therapy, impulse buys, and even how items are priced all tap into our brain's reward system, especially dopamine.
It’s not just about money—it’s about emotions, habits, and identity.
How It Shows Up
Retail Therapy: Shopping to boost mood.
The Sale Trap: Buying something just because it’s discounted.
Mental Accounting: Treating money differently depending on where it came from (e.g., spending a bonus more freely).
Lifestyle Creep: Increasing expenses as income grows.
How It Affects Me
Reduced awareness – Emotional spending overrides intentional decisions.
Financial stress – Small impulse buys can snowball into long-term money anxiety due to amounted debt.
Missed goals – Spending based on emotion delays savings, investments, and big dreams.
Today’s Newsletter Challenge
For one week, before making any purchase over $20, ask yourself three questions:
Am I buying this because I need it or because it promises to fix how I'm feeling right now?
If I convert the price into hours worked at my actual pay rate, is it still worth it?
If I had to leave this store/website and come back tomorrow to make this purchase, would I still want it just as much?
Awareness is the first step toward control. Notice the pattern, then nudge it.