Shopping has become a hobby for most people in the last decade. The advertising industry is now completely focusing on people towards Emotional spending and ultimately spoils our financial planning.
The advertising agencies invest a huge amount in how to attract young people aged 20-40 and live with the products they want to sell.
Have you ever gone to the appliance showroom? It makes us live in their world of spending. This is good for the country’s economy and GDP. But, this will never make us financially stable.
Emotional Spending Depends on Mindset:
Emotional spending makes us do the expenses to live our lives like others. We live in a society where we live for pride, we think doctors and engineers are the only best way of the profession. Drivers, carpenters, farmers, and electricians are not professions and not the perfect way to earn.
The interesting fact is, that even the Tea shop owner near IT Park makes more income than an IT employee. People think status on the type of job and not on income.
In the same way, emotional spending is also related to mindset.
Emotional spending is meant to be the expenses done without controlling our emotions. The transactions happen without taking any time to decide and grabbing instantly, without having a check on our bank balance. This is a specific mindset, which is filled in the current generation and this will lead to a life filled with debts.
Offer – The Biggest Scam:
More than any scam that occurred in the past, Offers will be the biggest scam of our financial life. Always you should understand there are expenses to be done for living.
We tend to buy products seeing the offer, rather than having thought about these matters.
Amazon and Flipkart are spending too much money on offers to attract a customer base. They launch Big Million Day kind of offering programs and make people spendaholics.
We tend to buy a new phone, dress, and other stuff only because of the offer and we don’t need it. We will be having enough stuff with us.
There are people in this world, who justify themselves by purchasing the unwanted as they need it for sure. This is what I mentioned in the previous heading on mindset.
If we require a product, buy it even if it is not on offer. If we don’t need a product, don’t buy it even if it is free.
Getting exposure to more products will increase our financial commitment.
Personal Loan Apps:
In recent years, companies like Money Tap, Pay Sense, Dhani, and India Lends have launched. The main role of these companies provide personal loans with high interest rates to a low salaried person.
They target the people, who are not eligible for bank loans. Their salary will be less than 15K per month. Even they target people who are in school and college.
It is very easy to avail of loans through this app. Many students buy mobile, tablets through this app. They provide a loan amount of Rs. 1000 – Rs. 5, 00,000.
This is the main reason for emotional spending and this makes people spendaholics. Most students create huge debts by side even before being employed.
Alongside, peer-to-peer lending adds to the market for emotional spending.
Role Of Temptation in Emotional Spending:
We people are generally weaker in handling emotions. The main reason is our temptation. We all use it to inspire the new products bought by our friends.
Many people use to buy all new mobiles launched by brands like Apple. They won’t care about what they are having is also Apple mobile.
The temptation is with everyone. People who can handle this are well-managing their financial lives. Those who cannot handle are the prey to it.
When we see our neighbor or relatives purchasing a car, or home, or starting a new business. We are also tempted to buy those materialistic objects without knowing their use for us.
This is natural for all of us. To avoid these mindsets, we have to understand our goals and desires in life. Having the mindset of delayed gratification.
Even before purchasing a dress, just think 1-5 times whether we need it. Replace the dress, don’t accumulate it.
- Emotional spending will always destroy financial planning.
- There are many ways to tempt us and increase our spending.
- Advertisements are made in a way to triggers our emotions and will keep us spendaholics.
- Offers are a big source for misleading about our financial stability.