How your emotions affect your spending

Happy or sad, our spending habits can be affected by our mood. Find out just how much it could cost you...

A ground-breaking neurological study into the psychology of spending that reveals how sad, stressed or bored shoppers are nearly 15 per cent more likely to overspend than those who are happy. The research commissioned by MoneySuperMarket, explores the connection between emotional wellbeing and consumer behaviour – and the role this plays in our lives. 

The month-long study, conducted by Mindlab, combined state-of-the-art "choice architecture" techniques with interviews and quantitative data to assess the spending attitudes of 2,500 Britons, and produce the nation's first-ever ‘Buying Mood Index’ – mapping patterns of behaviour to an individual's state of mind.

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500 participants' spending habits were analysed under four heightened states of emotion: boredom, stress, happiness and sadness, as well as a control group classified as “neutral”. Crucially, the researchers monitored how much the five groups were willing to pay for the same goods, such as clothes, food and holidays. Those who were described as sad, stressed or bored were 14 per cent more likely to overspend than their happy or neutral counterparts – and to be 4 per cent more impulsive. Stress was found to be the most expensive emotion overall – responsible for a near 10 per cent increase in likelihood of overspending.

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The research group was found to be 8 per cent more likely to spend on travel simply through boredom; while even purchases of functional goods were 7 per cent higher among those classified as stressed. Perhaps less surprisingly, sadness was found to drive a 12 per cent increase in travel-related purchases, while expected spending on food was 15 per cent higher among the stressed – proving the link with comfort eating.

The study found that some people are inherently more prone to emotional spending than others. Just as the traditional Body Mass Index is used to measure whether you’re a healthy weight, participants were scored between 18.5 and 40, depending on their level of spending on a Buying Mood Index. 

Participants who scored between 18.5 and 24.9 fell into a ‘healthy range’, meaning their shopping habits aren’t overly affected by their mood. Those scoring 25-29.9 were defined as ‘mild emotional spenders’, meaning their mood sometimes affects their spending, with those in the 30-39.9 range more likely to spend when feeling emotional. Anyone scoring over 40 was considered a ‘severe emotional spender’ and prone to serial buying behaviour when in a heightened state of emotion. 

The over 55s are in control

When it came to spending and age, the over 55s spent the least on impulse purchases (£156.11 per month) and only £60.72 on emotional impulse purchases, a whopping 135% lower than those in the 25-34 age bracket. They were also the least like to go over their monthly budget, on average exceeding it 1.66 months in a year.

The over 55s spent the least on impulse purchases – £156.11 per month.

However it may come as a surprise to find they're the most likely age group to overspend online with a credit card (12.34%) although in store with a card is still much more likely (64.25%). But they won't be paying using contactless technology – they're the least likely group to use it, with 41.35% steering clear of contactless payments. 

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• Happiness (20.61%) is the emotion most likely to get them to spend, whereas sadness is the lowest (4.1%) – their age group is the least affected by emotional spending, with 48.75% saying their mood doesn’t impact their finances.

• Average cost of shopping trip was £66.27, but if in a bad mood, this lowers to £53.06.

• The most they’ve spent on an impulse buy is £343.73 (average).

• 22.32% have made an impulse buy that they’ve had to take out a loan for or put on a credit card.

• They're most likely to go out and overspend after a stressful day at work (8.59%).

• But 57.87% said they’d regretted purchases made whilst feeling overly emotional.

Stressed spending on snacks, clothes and takeways

The qualitative study was supported by attitudinal research and data analysis conducted among 2,000 UK adults, which found that the most popular items for stressed spenders to splurge on were snack food (30 per cent), new clothing (20 per cent) and takeaways (17 per cent). Stressed men are four times more likely to purchase beer and twice as likely to buy electrical goods than the opposite sex – while women stress spending are three times more likely to splash their cash on clothes.

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• Contactless culture has had an impact, with two thirds (63 per cent) of all emotional purchases made in store put on credit or debit cards. Paying with cash rather than cards encouraged more than half (58.6 per cent) to seriously reconsider their purchases.

•  Almost half (41.4 per cent) of those aged between 18-35 splurge more on emotional purchases because they feel traditional financial goals – such as buying a house or saving enough for a comfortable retirement – are impossibly out of reach.

•  Those aged between 24-35 were by far the most likely to make impulse purchases based on their emotion, spending 135 per cent more often than those aged 55+.

•  While the experiment found that happiness decreased the likelihood of spending, the attitudinal research showed that this was the emotion people thought would most cause them to spend– revealing a distinct gap between perception and behaviour.

Dr David Lewis, Chartered Psychologist at Mindlab, said: “This research challenges conventional wisdom by showing that negative emotions, rather than feelings of wellbeing, are the most powerful drivers for overspending. Being aware of behavioural triggers is the first step in taking control, which is why we believe the MoneySuperMarket Buying Mood Index is an important and eye-opening way for every consumer to explore their relationship with what we spend and why."     

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Pip Heywood, Brand Director at MoneySuperMarket, said: “Conducting this study with Mindlab has been fascinating – it’s given us an opportunity to explore the psychology of spending and how a person’s mood affects their propensity to spend. Everyone has their reasons for buying that handbag, or booking that weekend away in the country, but they probably don’t realise that a situation three hours earlier, unrelated to the purchase, prompted them to buy it.” 

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The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.