Retail Therapy: Are You a Feel-Good Shopper?

While shopping can make you happy for a while, it has the potential to hurt your financial future in the long run. What is ominous is that half of Americans shop to feel better.

“It’s not just shopping, it’s retail therapy.” As a bumper sticker or a joke between friends, this may be amusing. But if shopping is a significant way to relieve stress, the expression isn’t so funny.

Soothing painful feelings with money is no healthier a behavior than medicating with alcohol or food. I have worked with several people who had extreme forms of this behavior, who described their spending clearly as an addiction. It gave them a physical high similar to what an alcoholic or drug addict experiences.

Like other addictions, it had destructive consequences, such as creating overwhelming debt, draining life savings, and destroying relationships with behavior like stealing from family members or employers.

Using spending as a medicator does not always show up in such dramatic ways. Even people who seem to live moderately and manage money responsibly can be “therapy shoppers,” who spend to feel better.

When I met Alexandra, for example, she was single, in her 40s, with a well-paying job and a substantial net worth. She was investing part of her income, was current on all her financial obligations, and had only a modest amount of debt. She was certainly not spending beyond her means or jeopardizing her future security. She didn’t appear to be in any financial difficulty.

When we looked at her budget, however, Alexandra was clearly uncomfortable with some of her spending habits. Instead of simply reassuring her that she was managing her money well and not overspending, I explored this issue with her. I brought up that she might be medicating her difficult emotions with spending. It was an “aha” moment for her. She told me, “I’ve been doing that for years.”

Alexandra’s problem wasn’t the amount she spent, but the reasons behind her spending. If she had a stressful day at work, she would go to the mall, in much the same way another person might stop at a bar for a couple of drinks on the way home. Shopping, finding bargains, and buying herself gifts were unthinking actions she used to soothe herself when she was upset.

She never stopped to ask herself whether she needed, had a use for or even wanted the things she bought. She didn’t spend more than she could afford, but she was spending time as well as money unproductively. She also cluttered her house and her life with clothes she didn’t wear, knickknacks she didn’t care about and gadgets she didn’t use.

Once she realized the emotional reason for her shopping, Alexandra found more constructive ways to deal with stress. She learned that talking to a friend, writing in her journal, meditating or taking a walk could serve the same purpose as a trip to the mall – and were healthier responses to difficult days.

For Alexandra, recognizing that she was a therapy shopper was enough to help her change. Others, whose behavior is more deeply ingrained, might find change more difficult. They might benefit greatly from working with a financial therapist with the expertise to help them look at the emotions underlying their spending patterns.

If you think you may be using spending to deal with stress, it’s important to look beyond the numbers. The main issue isn’t whether your “retail therapy” is affordable or whether it causes serious financial difficulties. If a pattern of spending is creating discomfort for you, it may be a good idea to explore what’s behind that spending.

Follow AdviceIQ on Twitter at @adviceiq

Written by Rick Kahler, CFP. Rick Kahler is president of Kahler Financial Group in Rapid City, S.D.

AdviceIQ delivers quality personal finance articles by both financial advisors and AdviceIQ editors. It ranks advisors in your area by specialty, including small businesses, doctors and clients of modest means, for example. Those with the biggest number of clients in a given specialty rank the highest. AdviceIQ also vets ranked advisors so only those with pristine regulatory histories can participate. AdviceIQ was launched Jan. 9, 2012, by veteran Wall Street executives, editors and technologists. Right now, investors may see many advisor rankings, although in some areas only a few are ranked. Check back often as thousands of advisors are undergoing AdviceIQ screening. New advisors appear in rankings daily.