Smart SpendingSmart Spending

3 emotions that can drive you into debt

Don't let your feelings get the better of your ability to make smart financial decisions.

By Jun 11, 2014 12:09PM
CNBC on Msn MoneyThis post comes from AJ Smith at partner site

Image: Happy Man © Steve McAlister/Brand X Pictures/PictureQuestMany factors go into your financial health: saving habits, spending habits, debt, income, monthly payments and, believe it or not, your emotions and attitude. Many of us look for emotional satisfaction by purchasing new items. Most commonly, a new purchase brings excitement and happiness, while the resulting bills bring a different set of emotions. Because of the delayed timing, the process continues and many Americans spend sleepless nights surrounded by expensive purchases.

Even with the tightest of budgets and savviest of financial decision making tools, most of us have made a purchase we may regret based on how we felt leading up to the moment of transaction. Sometimes, we are lucky enough to have purchased an item with a good return policy. But, other times, our emotions can lead us to make poor financial decisions that we cannot erase. Here are three feelings that affect how we spend and how we save.

1. Sadness

When you feel down, it may seem like a new pair of shoes or a night of fine dining will left your mood. Being upset is often a trigger of spending irresponsibly because it causes impulsive decisions. Instead of thinking things through, you react emotionally and don't think of consequences.

2. Euphoria

We see this often with athletes, celebrities and newly promoted friends. Coming from a situation of smaller income to that of larger income can lead people to be overly generous. Maybe instead of buying one sports car for themselves, they get one for them, one for each of their siblings, and one each for mom and dad. Many lottery winners or suddenly-wealthy people cite this as a reason for blowing through their money quickly.

3. Apprehension

Being indecisive or stressing over every decision is not the solution. These traits often lead to investment paralysis and rash decisions pressured from friends or other influencers. Doing research to make an informed decision is a good idea, like when it comes to whether you should buy or rent a home. But hemming and hawing until someone else (a friend, family member or even stranger) makes the decision for you isn’t the best idea.

Of course this doesn’t mean you should try to block out all feelings altogether, but try not to let a bad date cause you to buy a new wardrobe or let a new job convince you to buy everyone at the bar a round of drinks -- all 80 of them. Financial decisions guided by a fleeting emotion often lead to overspending -- and debt. And, unfortunately, your amount of debt is a major factor in how your credit scores are calculated, meaning that emotional spending can have long-term consequences. 

Try to keep your emotions from guiding your financial choices. A great way to avoid giving feelings too much power is to study your own patterns, recognize what triggers emotional spending for you, and look for alternate, less expensive, ways to deal with those feelings.

More from

Jun 12, 2014 9:03AM

i'm surprised they don't list "depression" as a key emotion driving people to spend cash. 


that seems to be the root of many I see out of control with their cash. 

Jun 15, 2014 4:00PM
The article forgot to mention 'stupidity' as a root cause of debt.
Just take a trip to any casino to see people who have nothing gamble what little money they have on slots and table games... oh, and then file for welfare when it all crashes.

The euphoria is right on....Have met more than a few people who have used, "found money," as an excuse to go on a shopping spree.

Jun 15, 2014 4:42PM
I don't have a problem because I live the way I did when we were poor tenant farmers. As a side observation every time I see a actor or washed up sport star trying to sell me a product I change stations at once. Getting back to the spending thing, that doesn't apply when it comes to cars. I love them. 
Jun 15, 2014 8:32AM
Hooray!!  A perfect solution to get out of debt. Go shopping!! Just what the credit card companies want to hear.
Jun 15, 2014 4:47PM
I wish people who comment on here would ;just comment and not bring the hate thing in. No politics would be a start. We all know that dems hate pubs and vicer-versa .. Get over it as it will never change. Lobbyists have to get their way somehow.
Jun 15, 2014 3:34PM
Yeah and hungry kids another..... Need more food stamps for beer.
Jun 15, 2014 11:40PM
I love things that "left" my mood. Learn to proofread, MSN.
Emotion reelected the least effective President in American history too!
Jun 16, 2014 4:10AM
Fear. Fear based buying of food staples, weapons,and ammo. Looney Tunes.  When it all goes to hell, your six months of MREs and a few thousand rounds of ammo will not save you.
Jun 15, 2014 6:14PM
Any type of addition will put you in the poor house.Bordom is a sign you might go off the track.Try to say busy get a hobby.,try to help out people,they will repay you with kind. Good luck
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.