Five Tips to Overcome Shame-Spending and Build a Healthy Relationship With Money
Shame-spending refers to a cycle of impulse buying to boost your mood, resulting in later feelings of regret. A new study from fintech start-up Kaldi reveals that 91% of Gen Z engage in emotional spending, with 74% experiencing remorse soon after.
Despite many expressing a desire to save, factors like boredom, social media trends (22% buy after seeing TikTok videos), and feelings of unattainable savings goals are fueling daily splurges for nearly a quarter of this generation.
Here are five actionable tips for overcoming shame spending (by making small, sustainable changes):
Stack your savings
Make the most of your purchases by layering savings and discounts. For instance, you can use a credit card or loyalty card that earns points, combine it with a browser extension or plug-in that finds discount codes, and sign up for cashback services. Apps like Kaldi take this a step further by turning your cashback from everyday spending – whether at the supermarket or online – into investments, allowing you to grow your savings through the cashback you earn at the same time as gaining loyalty points from your favourite brands.
Create friction to resist impulse purchases
An effective way to curb impulsive spending is by creating friction between yourself and a purchase. Turn off one-click checkout options and resist auto-saving your payment details. This not only reduces impulse spending but helps you to become more mindful of the influences that advertising is having on your everyday spending. Another strategy is to give yourself a certain amount of time before pressing ‘pay’ to think through the purchase. Often, this pause will reveal the difference between the excitement of an impulse buy and the actual satisfaction of deferred gratification. Building in these small barriers helps you shop more intentionally and rethink how marketing tactics might be influencing your decisions.
Create a “wants and needs” list
When you’re tempted to make a purchase, add the item to a list on your phone instead of buying it immediately. Revisit the list after a set period, whether this be a week or a month. If after this timeframe you still want the item and can afford it, then give yourself permission to buy it. To go one step further, you can use cashback earnings from apps like Kaldi to fund your treat guilt-free.
Give every pound a purpose
Build a spending plan where every pound has a purpose. You could opt for a zero-based budget where you decide exactly what you’ll spend every pound of your income on, or you could go for a strategy where you allocate a percentage to savings, a percentage to bills, and then the rest for fun stuff. This will help to flip the narrative on shame-spending, removing the guilt from buying those all-important ‘little treats’ with your remaining disposable income. Understanding where your money goes also helps you avoid unnecessary splurges and provides peace of mind for unexpected expenses, such as a new washing machine.
Set up a payday routine
Treat payday as an opportunity to check in on your finances. Set a reminder in your calendar to review things like refunds, upcoming bills, and whether you can top up your savings. These small habits can make a big difference over time. To help, consider using open banking apps, which can be invaluable for organising your finances. They give you a clear picture of where your money is going by allowing you to see all your accounts in one place. Some apps even enable you to link your rent payments to boost your credit score, which is beneficial if you’re considering applying for a mortgage.
Written by Alice Tapper
Alice Tapper is working with cashback and investments app Kaldi to end shame-spending by helping consumers develop healthy financial habits.