ABC FinanceBlogHow to Manage Compulsive Spending & Shopping Addiction

How to Manage Compulsive Spending & Shopping Addiction

How To Manage Compulsive Spending
How To Manage Compulsive Spending

We collaborated with consultant clinical psychologist Dr Nick Johl to discover more about compulsive spending, shopping addiction, and impulse buying. Read on to find out more…

Compulsive Spending

What is compulsive spending / shopping addiction?

Nick shared that “shopping addiction, which is also known as compulsive shopping disorder, is where the desire to make purchases or spend money becomes so great that it causes you to lose control over whether you act on these urges or not. In recent years, shopping addiction has come to incorporate online shopping, as well as ‘face-to-face’ transactions. As people spend an increasing amount of time online, shopping addiction is an issue people are facing more than ever.

What are the immediate/short-term/long-term psychological effects of compulsive spending?

“Having a compulsive urge to shop and spend is likely to be having a dramatic and destructive effect on your life, and possibly the lives of those closest to you. While you may still experience that initial rush of endorphins and dopamine when you buy something, it’s likely that these temporary feelings of excitement give way to guilt, shame, and anxiety in the immediate aftermath of making a purchase. These feelings may then result in you going back to the shops or using shopping apps to spend more, and thus, you soon become trapped in what feels like a vicious cycle.

What are the underlying causes of this disorder?

“Many people develop an addiction as a way to cope with their emotions. This is the same for those with a shopping addiction. Compulsive shopping and spending may be a way for you to avoid or mask negative and uncomfortable feelings such as sadness, boredom, stress, and anxiety. For example, if you are dealing with something difficult at work, home, or in your relationships, you may turn to shopping to distract yourself and temporarily boost your mood. Over time, shopping may have become a habit and something that you consistently resort to as a distraction from life’s problems.

“A shopping addiction can also be a way for a person to cope with difficult emotions, feelings, or memories. It can become a way of numbing and muting pain or distress. However, it is an unhealthy coping strategy that doesn’t effectively deal with this pain or distress and can also lead to a person feeling worse in the long term.

Which mental health conditions can trigger/intensify behaviours associated with compulsive spending?

“When supporting clients with compulsive spending we see an array of existing mental health conditions which can worsen their spending habits. This can include general anxiety where we feel out of control, so we gain control by over spending. Low mood or depression where we engage in compulsive shopping to receive a temporary boost to our mood or general feelings.

“The strongest indicator of compulsive spending is if you already have a tendency to become addicted to things in the past. Often termed an addictive personality, this can often intensify the urges to spend money beyond your means.

What are the behaviours/symptoms to look out for that indicate your spending is getting out of control and/or becoming compulsive?

  • You spend as a reaction to feeling angry, sad, or stressed
  • Your buying habits constantly distract you from other priorities
  • You buy excessive amounts of things you don’t really need
  • You hoard the items you buy and don’t use the things you purchase
  • You spend excessive amounts of money on extravagant gifts
  • You spend over and above your budget, or ignoring your budget
  • You spend an excessive amount of time visiting shops or shopping online
  • You have multiple store cards, juggle a number of credit cards, and have run up a significant debt
  • You hide purchases, receipts, and bank statements from family members
  • You’ve become increasingly secretive around shopping habits or finances, or both
  • You get angry at spending limitations imposed by others
  • You have attempted to cut down or stop shopping in the past, but have been unable to (this may have included deleting shopping apps or making a monthly budget, but finding that you were unable to persevere)

How does hoarding relate to compulsive spending?

“Compulsive hoarding is often the result of compulsive spending. With compulsive spending, there is often a lack of awareness of how many things we are buying. With the understanding that this spending habit is often to manage a negative feeling, we are not spending in a logical way to assess if we need to item or whether we plan to replace an old item with the new one we are purchasing.

“What this can often lead to is no management of what purchases we are holding on to which can give rise to another stressor in terms of compulsive hoarding; the inability to get rid of things due to a strong emotional attachment to them.

Does binge eating relate to compulsive spending?

“You may struggle to see the relation between binge eating and compulsive spending. However there are times when a person can present with both unhelpful habits. This is due to the similarities in what drives both behaviours to occur. It can be helpful to hold in mind that for the majority of cases where someone is binge eating or compulsive spending they are doing so due to the following reasons;

  • Engaging in this behaviour as a way to manage distressing feelings which they are attempting to ignore or distract from.
  • Seeking out a new, more positive feelings by over indulging in both what we eat and also what we buy
  • Struggles with impulse control and not having the ability to experience food and consumption in moderation

In your opinion, do credit cards and BNPL (buy now, pay later) encourage excessive spending?

“Put simply, yes they do. The healthiest approach to spending which I hear older people talk about is ‘I only buy things with actual money which I have in my account’. This mindset was related to spending within your means and also purchasing items you have the whole amount for, in your bank account. With credit cards and BNPL, we no longer need to check if we have the full amount of funds available. We only now need to think about paying this back over time, in what appears to be smaller, more manageable payments. What this can lead to, is gaining that instant gratification of spending, without being mindful of how much we are spending over time. The phrase ‘out of sight, out of mind’ comes to light here.

What are the potential effects (financial, relationships, mental health) of this disorder?

  • Financial strain

Shopping addiction can lead to debt from credit cards, store cards, loans, and overdrafts

  • Relationship problems

It can place a significant strain on your relationships. This can happen for a number of reasons, including the secrecy, isolation and emotional pain caused by the addiction. If family or friends have noticed that there’s an issue, this may have also started to put added pressure on your relationships

  • Worsening mental health

Addiction itself can place a significant strain on your mental health, leaving you feeling sad, stressed, and anxious. If you are using shopping as a way to deal with difficult emotions you were already experiencing, your addiction can also leave you feeling worse or even depressed overtime

Please share actionable tips and advice on how people stop compulsive spending.

“The first step is to take some time to reflect on the function of your compulsive spending. Put simply, ask yourself why am I doing this? What purpose does it serve? If you are able to ask yourself this question, you may realise that there is a deeper emotional distress taking place which you should stop avoiding. If your compulsive spending is having a negative impact on other areas of your life or bringing you secondary emotional distress such as guilt, shame, having to lie to other people; then therapy may be a great investment.

“In the moment, if you notice a strong emotional urge to buy something and you are lacking logical thinking, then delay the purchase until feelings have calmed down. For online shopping a great way to do this is saving the items and delaying the purchase. Or filling up your online basket and delaying the purchase. You will often find that returning to the basket at a later date, when feeling less of an emotional urge, will shape whether you proceed with your purchase.

“Another tip is to review your existing purchases. Assess things like how often existing items have been worn, how many of the same item you have and creating a rule of 1 in, 1 out. This could mean selling unused items on platforms like Vinted or giving them to charity (remember the link between hoarding and spending).

Budgeting is also key. The last thing you want to do is engage in compulsive spending before the non-negotiable spending has occurred. The non-negotiables are the monthly bills, etc., that we need to cover first. Only once all other financial commitments per month have been achieved, would we consider ‘treating’ ourselves to the purchase of an item.

“Another task you can engage in is an activity called ‘morals and values assessment’. What you do here is take a look at your spending in the last month and identify which spending habit holds the most moral value for you. This could be around eating out due to your value of enjoying new foods. It could be going to bars as this holds a strong value of socialising with friends. What you will quickly find in this review if the purchases that are not attached to any moral or value and this is most likely a compulsive purchase.

Impulse Buying

What is impulse buying?

“Impulse buying is the sudden and immediate purchase of a product without any pre-shopping intention. It occurs after shoppers experience an urge to buy, and is often spontaneous without any hesitation.

What triggers impulsive behaviour?

“The triggers for this behaviour are complex in nature and are based on a number of factors including your personality trait, your belief system, the reward system in our brains and your management of emotions.

However the below appear to be the most common triggers:

  1. Getting a deal. We all love the feeling that we have got ourselves a deal.
  2. The positive emotional rush of an impulse buy
  3. The physical experience of being in the shop
  4. Product placement. The product you don’t need being very close to the product you do need.
  5. Novelty. With most things, we know that eventually, the novelty wears off.

What are the immediate/short-term/long-term psychological effects of impulse buying?

“The impact starts to become the same impact as compulsive spending. What starts off as a nice, new experience starts to impact on your spending habits, financial stability and if you are not careful, your shopping experiences start to become distracted by searching out for the best deals out there, irrelevant of whether you need them.

What tricks to retailers use to get us to impulse buy?

“Retailers spend lots of time and money getting you to impulse buy. A few common techniques retail businesses use to get you to spend more include:

  1. Clever product placement in the stores
  2. Having constant sale sections
  3. Highlighting price reductions
  4. Offering ‘multibuy’ deals
  5. Enabling ‘pester power’, by placing items in children’s eyeline
  6. Placing stock at checkout aisles
  7. Creating ‘FOMO’ (fear of missing out) through limited time offers

“Spreading items across the whole shop floor encourages you to explore aisles of the shop you had not planned for. Our brain is more attracted to certain colours which they place on purpose to draw you in. They place products just at the right height so they are constantly in your sight of vision.

“Constant sales sections create a mindset of ‘bagging a bargain’, which can encourage people to part with their cash. When it comes to multibuy deals, as attractive as multibuy offers can sound, sometimes a quick calculation shows that it can actually cost more when buying items through these deals. Retailer also commonly make the most of ‘pester power’ – putting lots of items in the eyesight of children is another tactic retailers use, with the aim of pestering parents to buy the item for them. Creating ‘FOMO’ is also another common tactic – shops use a range of marketing tactics to ensure you feel like you will experience FOMO if you do not engage in their offers, and they achieve this by stating ‘limited time offer’, or ‘once it’s gone, it’s gone’.

“Online platforms always draw you in with a discount if you submit your email. This is their way of then targeting you with marketing and discount codes and first access to sales. You can often find yourself opening the email, being on their website and purchasing a host of items which you have not planned for 20 minutes ago”.

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*Insight shared in May 2023, and is subject to change

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