How to Stop Emotional Spending

by | Jun 21, 2023 | Spending

What’s your go-to strategy for getting through a tough day, or a hard time? Do you turn to something like calling a friend, journaling, or a comforting TV show? Or, are you more likely to peruse your favorite physical or online store and click “add to cart” for an item that you think will make you feel better?

That’s emotional spending. It’s very common – but chances are, the purchases made as a result are not bringing about true satisfaction or aligning with your long-term goals.

Let’s cover what emotional spending is and how to take steps to reduce it. 

What is emotional spending?

Emotional spending happens whenever someone spends money in response to strong emotions, whether positive or negative. A nickname for emotional spending is “retail therapy.” It’s a coping mechanism; it’s a way to turn around a bad day. For some, spending the money is a substitute action for processing and honoring feelings. 

But can it actually make someone feel better?

A study from the University of Michigan published in the Journal of Consumer Psychology evaluated whether retail therapy can actually alleviate sadness, when sadness occurs from a loss of control over one’s environment. The researchers compared a group of people browsing for hypothetical purchases to people who were actually making buying decisions. They found that when people are sad, making purchases, “can help to restore a sense of personal control over one’s environment and reduce residual sadness.” So, emotional spending sometimes does actually make us feel better!

It’s important to remember that emotional spending is not about buying things you actually need. If you happen to have a bad day and make a necessary purchase, that’s just a coincidence – even if you get a sense of satisfaction from it. 

What’s wrong with emotional spending?

Perhaps unsurprising given the findings of the study on emotional spending, retail therapy has become pretty normalized in our culture. The sitcom Parks and Recreation coined the phrase “treat yo self” which has become part of the American English lexicon – encouraging people to indulge by purchasing things that they don’t really need. 

It’s important to be mindful of emotional spending because while it can help alleviate feelings of sadness, it does come at a financial cost. While our funds can (and should) be used on purchases that bring us joy and satisfaction, oftentimes with emotional purchases, the buying decision is impulsive. As a result, consumers often end up regretting these purchases, and in turn, the item and funds go to waste. 

Ultimately, emotional spending may take someone off course of their financial goals by causing them to spend in a way that doesn’t align with their needs or values. 

How to stop emotional spending

If you’re hoping to cut back (or even totally stop) emotional spending, kudos to you! We know it’s challenging to change purchasing habits, even for the good. Below are strategies that you can use to make this adjustment. 

Adjust your spending habits when feeling strong emotions

The first step on this journey is simply to modify your direct spending habits. So, set some guidelines around your spending when you’re tempted to make a purchase driven by your emotion. You can choose to focus on reducing the quantity of purchases, the amount of money spent, or both! Here are some suggestions for adjustments you can make:

  • Go in store to shop instead of online
  • Instill a waiting period before making purchases
  • Support small, independent businesses rather than national or global chains
  • Unsubscribe from retail marketing emails and remove shopping apps from your devices to remove the temptation
  • Pick a fun larger purchase to save up for, like a vacation, and put money aside in your Milli Jar for that when you feel compelled to make an emotional purchase

Ultimately, the best way to adjust your spending habits is to be intentional about what in life genuinely brings you the most joy, and prioritize spending your funds in that way. But, even cutting back on extraneous purchases is a great way to make progress. 

Honor and process emotions in ways that do not involve spending

Emotions are a totally normal part of being human, and emotional spending comes from trying to address strong feelings. But, if you want to stop emotional spending, you’ll need to replace spending as a way to process your feelings. Get introspective about what’s really going on and driving the compulsion to spend. Then, take that on more directly, by taking action that directly celebrates, addresses, or helps you process the specific emotion. 

Here are some possible, no-cost options that may serve you better than spending:

  • Journal about your feelings
  • Talk to a friend, family member, or mentor
  • Exercise in a way that brings you joy
  • Do something productive like housework, gardening, paperwork – especially if you’ve been putting off a task
  • Create something, like artwork or a home cooked meal
  • Try to learn something new
  • Go back and dust off an old skill
  • Turn to a comforting book, TV show, or movie
  • Do something kind for someone else

Whichever options you try, go easy on yourself. If you’re having a hard day and also working on cutting back on your emotional spending, remember – anything you try that doesn’t cost you money is progress! 

Remove or reduce emotional spending triggers

For some, emotional spending is a repeating behavior. Whenever there’s a negative pattern, that is an opportunity to make a bigger change. First, identify any recurring feelings that cause you to spend. Some common ones are sadness, stress, insecurity, grief, anxiety, or dissatisfaction with some aspect of life.

From there, work backwards to figure out what’s causing those feelings. If you can identify that, you may be able to see how you can address the problem at the core. For example, maybe you’re driven to emotionally spend due to your stressful job. So, if you’re able to reduce your workload or change jobs to something less stressful, you might feel less compelled to make emotional purchases. 

This solution is definitely playing the long game. It may take weeks or months to solve the underlying trigger. But, it can be worth it when you find that you don’t struggle as much as emotional spending because you’ve overcome a particular challenge!


Spending money helps us exercise choice and freedom. So, it makes sense that if you’re having a tough time, buying something can help you counterbalance strong feelings. But if you’re looking to make some changes to your spending to better suit your goals, cutting back on emotional spending is an awesome place to start!

Now that you’re more aware about the causes of emotional spending, and what alternative options you have, you’ll be well on your way to making those first few changes to help you on your financial journey. Are you looking for a tool to help you start being mindful of your spending? With Milli, we can give you the spending insights you need to help you monitor where your money is going – whether you frequent a particular business or category of spending.

Adjusting your spending habits is totally possible. Be introspective and realistic, then make a change when the opportunity arises. You’ve got this, and Milli is here to help!

Keep reading on the Milli blog:

Aspirational Spending: What is it, and how to Combat It
The Five Components of Financial Literacy
How to Cover Unexpected Expenses