All parents want the best for their children, and raising, educating, and providing them with a fulfilling childhood is a costly endeavour.
Analysis by digital wealth manager Moneyfarm found that the cost of raising a child in 2023 was £223,256, an increase of £20,596 compared to 2022. With the cost of living in the UK also increasing every year, parents are facing some serious financial challenges as they raise their children. Everything from the cost of formula milk and childcare to clothes and groceries has increased.
On top of this, many parents fall into the trap of emotional spending. Emotional spending is buying things as a response to emotional triggers instead of a rational need. For parents who want the best for their children, as well as the stress of being a parent, emotional spending can quickly spiral out of control and lead to serious financial repercussions. In this post, we look at five ways that parents can avoid emotional spending.
Don’t Compete with Other Parents
When it comes to the psychology of spending money, competition can play a big role in emotional spending. Comparison is a part of human nature and is very normal for children and adults. However, there is a possibility that this can turn toxic and lead to a parent feeling pressured to match another family, especially if there is a financial gap between the two families. This can lead to feelings of jealousy and the fear that they are being judged, feelings that are only amplified in the age of social media. Every family has a unique set of circumstances, and there will always be a family that can afford more for their children. One way to avoid these feelings is to focus on what you have. For example, if you feel jealous regularly, try to think about or even write out 4 or 5 things that you’re grateful for and that are unique to your life. Focus on how you are able to provide the important things for your children rather than the material things they don’t have.
Limit Shopping Online
Online shopping has made being a parent much easier, especially through platforms like Facebook Marketplace and eBay. Today, many parenting social media accounts are linked directly to online stores. With so much available at the touch of a button, it is easy for parents to buy items on a whim. This is one reason why research has found that 1 in 10 families in the UK “spend more than they have in their current account at least seven months each year, and more than half (59%) spend more than they earn at least one month a year”. They may feel guilty or anxious that their child doesn’t have everything they need, and advertisers lean heavily into appealing to the emotions of parents, especially new parents. If shopping online, make sure you know beforehand exactly what you want to purchase and only purchase that. Shopping in a brick-and-mortar store has also been found to reduce the chance of overspending.
Keep on Top of Your Finances
Having a child costs far more than most parents realise, and the essential expenses can quickly rack up. Emotional spending will only add to your bills and put you even more out of pocket. This is why knowing exactly how much money you have and how much you can afford can help you avoid emotional spending. Poor financial management combined with emotional spending can lead to dire financial consequences for parents, resulting in unexpected credit card bills at the end of the month. By allocating definitive parts of your budget to different aspects of your home life, you can set parameters that will limit your spending. This will give you more control over your financial situation and reduce the chance of buying items purely based on emotion. There are simple steps you can follow to keep your family finances in better health, such as preventing extra costs and cutting down on unnecessary bills.
Financial Therapy
Being a parent is stressful and can easily lead to emotional spending. If it is already a serious issue or you see some bad habits forming, financial therapy may be the best course of action to avoid emotional spending. Vicky Reynal, a psychotherapist who specialises in financial therapy, explains that “the psychotherapeutic principle behind financial therapy is that by making the unconscious conscious, you have greater control over it”. She notes that “We cannot ease the anxiety that gets evoked by money unless we acknowledge and experience our emotions.” A financial therapist will be able to work through the key reasons behind your emotional spending. The good news is that there is an increased demand for financial therapy in the UK as more people realise the importance of seeking professional help with their finances.
Be Mindful of Emotions and Spending Habits
In some form or another, everyone will purchase an item based purely on their emotions. The key to avoiding emotional spending becoming a negative habit is becoming more aware of your emotions and how they relate to spending money. In order to fix the problem, you need to pinpoint your emotional triggers so you can actively look to avoid them. If you spend because you are excited to buy something new for your child, ask yourself why you get this endorphin rush. If you are jealous of your peers, avoid their social media accounts where comparison is most likely to occur. You can implement simple rules like only buying something after 48 hours of seeing it. This will give you time to reflect on your reason for buying that item. Even simply taking a breath before purchasing an item can decrease the chance of you making an impulse buy.
Emotional spending is something that nearly all parents will experience as they deal with the stress of raising a child. If you are worried about your emotional spending habits, we hope the above article proves useful.