Online shopping is available 24/7, making it easy to indulge in retail therapy whenever you’re feeling low. With many consumers using PayPal or saving their credit card details on Google, spending money is so easy that it may not feel like a big deal when clicking the ‘order’ button. While treating yourself every once in a while is normal, making poor and impulsive spending decisions often occurs when you’re in a bad frame of mind.
A 2019 comfort spending report by Mozo found that 81% of Australians are spending money as something to do when they are bored, or to make themselves feel better when they are stressed or anxious. Nationwide, comfort spending reaches $25.5 billion a year, which averages out to $1,430 a year.
The findings showed that 47% of people spent money when they were bored, and 45% of people spent money when they were stressed or anxious. Another study by MyState Bank found that 62% of Australians said that their emotional state was enough to drive them to make purchases.
Here are some ways you can deal with comfort spending:
- Get into the habit of doing a different activity when you’re bored or stressed. There are many hobbies that would benefit your mental and physical health more than shopping, such as taking a walk or talking to a friend.
- Give yourself some financial freedom. If you immediately implement an over-restrictive budget, you might be tempted to splurge after feeling deprived. Try to find a balance between treating yourself every now and comfort spending as a habit.
- Recognise your comfort spending behaviour and set a budget for it, instead of eating into your savings
- Avoid using a credit card, or if you do, make sure you pay the balance off in full each month.