How Stress Impacts the Way We Spend and Our Relationship with Money

Stress: it’s a word we hear almost daily. But have you ever stopped to consider how stress could be impacting your finances? Understanding the link between stress and spending can help you break free from unhealthy financial patterns and empower you to take control of your money. Let's magic school bus 🚍 to our nervous system and dive into the neurological aspects of stress and its effects on our relationship with money. 

The Neurological Connection

When we experience stress, our brain 🧠 goes into survival mode. The amygdala, the brain's fear center, becomes hyperactive, while the prefrontal cortex, responsible for rational thinking and decision-making, takes a back seat. This neurological shift can lead to impulsive and emotionally driven spending behaviors.

According to a study by the American Psychological Association, 72% of adults report feeling stressed about money at least some of the time. (Let's be honest, doesn't it feel like everyone's stressed about money!) When stress levels spike, our brains crave instant gratification as a way to cope. This is where retail therapy comes into play. Buying something new can give us a temporary dopamine rush, a “feel-good” chemical that can momentarily relieve stress. However, this relief is fleeting and can often lead to buyer’s remorse and financial strain.

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Stress Spending in Real Life

Imagine this: you’ve had a rough day at work. Deadlines are looming, your boss is breathing down your neck, and to top it off, you’re stuck in traffic on the way home. You finally get home, exhausted and frustrated. You open your favorite shopping app or head to the mall and start browsing. Before you know it, you’ve added several items to your cart, and you're convinced that these purchases will make you feel better.

Sound familiar? This scenario highlights how stress can trigger impulsive spending. In fact, a survey by Credit Karma found that 31% of Americans have engaged in “stress spending,” with an average expenditure of $1,750 on unplanned purchases. (This survey feels low!) These impulse buys might provide a brief sense of relief, but they can also lead to increased financial stress, creating a vicious cycle.

The Overlooked Issue: Financial Stress in Therapy

Almost half of Americans seek therapy for various reasons, but how many of these individuals discuss their financial stress with their therapists? Surprisingly, not as many as you might think. Despite financial stress being a pervasive issue that intertwines with other aspects of mental health, it is often a neglected topic in therapeutic settings.

A study by the Journal of Financial Therapy highlights that while financial stress is a significant concern for many therapy clients, it is not always addressed in therapy sessions. This gap can leave individuals struggling to find effective coping mechanisms for their financial worries, perpetuating the cycle of stress and impulsive spending.

Therapists, traditionally focused on mental health, may not always have the training or comfort level to dive deeply into financial issues. This omission can lead to an incomplete approach to stress management and overall well-being.

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Breaking the Cycle

So, how do we break free from the cycle of stress-induced spending? Here are a few strategies:

1. Identify Triggers: Recognize the situations that trigger your stress and subsequent spending. Awareness is the first step toward change.
2. ⭐️Create a Budget: Establish a personalized budget, that includes room for your emotions will help you stay on track and reduce financial stress. Knowing where your money is going and having a plan can provide a sense of control and security. It's the only thing you can really control, so by taking your budget seriously, you will feel inherently less stressed about money. 
3. Practice Mindfulness: Before making a purchase, take a moment to pause and reflect. Ask yourself if the purchase is a need or a want and whether it aligns with your financial goals.
4. Find Healthy Alternatives: Seek out non-monetary ways to relieve stress. Exercise, meditation, or even a walk in nature can provide a similar dopamine boost without the financial cost. Other activities could be calling a friend, being near water and or reading your favorite book. 
5. Seek Support: Don’t hesitate to reach out for support. Whether it’s talking to a financial coach, joining a support group, or confiding in a trusted friend, sharing your struggles can help you feel less alone and more empowered.

The Power of Financial Empowerment

Understanding the connection between stress and spending is crucial for building a healthier relationship with money. By recognizing the neurological and emotional triggers behind our spending habits, we can take proactive steps to manage stress in healthier ways.

Remember, financial empowerment isn’t about depriving yourself; it’s about making conscious choices that align with your values and long-term goals. Breaking free from the cycle of stress-induced spending can lead to greater financial stability and overall well-being.

At Beyond the Green Coaching, we’re here to help you navigate these challenges and build a stronger, healthier relationship with your money. Together, we can turn stress into strength and pave the way for a more empowered financial future. Don't hesitate to reach out [email protected]