Budget Therapy

‘Retail Therapy’ is deemed as the act of shopping for the primary purpose of improving one’s mood. If you go on to research the psychology behind the not-so-recent trend, you’ll see a plethora of experts who claim there’s actually some truth to it all.

Updated June 03, 2020

It’s quite normal for tension to arise from our everyday lives, even more so that you might seek the easement of such tension. All’s well in moderation, right? But consider, for a moment, the motivation behind the seemingly harmless act of retail therapy. As you shop, you’re naturally visualizing how you’ll use the products. In doing so, you are actually visualizing your new life. Kit Yarrow, a professor of psychology and marketing at Golden Gate University in San Francisco suggests, “The purchases themselves are only part of the allure. Shopping – and visualizing – is preparation and it makes people feel more in control and less anxious about [these tensions].”

There it is – visualization – the driving force behind retail therapy and nearly all other forms of self-solace. But what if there was a different approach you could take to achieve the same fulfillment without sabotaging your long-term financial stability? What if you chose budget therapy over materialistic mindlessness?

You’re smart. You didn’t get to where you are without hard-work, determination, and some good ol’ fashioned, all natural intelligence. Unfortunately, if you’re like most recent grads, you’re struggling under the weight of student loan debt and wondering how in the world you’re supposed to start saving. It’s easy to feel out of control and financially trapped, but learning how to budget your money properly is guaranteed to deliver the same remedy as retail therapy without being quite as costly (or as fleeting).

Here are some great tips to turn retail therapy into budgeting bliss.

Budget Planning

Rob Berger, a Forbes Contributor and an expert budget planner, claims “the goal of a budget is to help us control our spending so that we can spend less than we make and focus our spending on what matters most to us. However, you choose to budget, it should meet this goal. If it doesn’t, you’re doing it wrong.”

This means it is important to understand your goal and create a budget for how to get there most effectively. At the same time, try to enjoy the process instead of obsessing over the outcome. Make your goal be the budget itself and use that as encouragement to keep to your budget every month. And remember, it’s more important to be consistent with your budget planning than it is to be perfect.

Budget Planning is Forward Thinking

When attempting to create a budget with maximum effectiveness, it’s important to apply it to the future. As you prepare for next month, give every dollar a name. When you do this, you’re telling your income where to go instead of scratching your head at the end of the month, wondering where it all went. Keep in mind seasonal necessities like paying extra for your electric bill to keep your house cool in the summer. Don’t forget about holiday gifts in December. Planning to get a nice tax return this year? Make sure that extra income is accounted for. If you don’t have a plan for it, it’s likely to slip out the back door when you’re not paying attention.

Flexible Budget Planning

Apply the familiar experience of shopping at the mall to budget planning. You walk through the endless aisles of products, perusing your options for the perfect fitting you-name-it. As you visualize your ideal financial self, you may buy a pair of boots you simply must have to survive the winter. But it’s not like you’re never going to buy another pair of shoes again. The same applies for budgeting. As life changes, your wardrobe and your budget will change as well.

Track & Save

If destructive habits like retail therapy arise out of a need to feel more in control, what could be more empowering than coupling that same drive with a healthy dose of self-control? Tracking every dime you spend for a month will be extremely eye-opening and reveals your sometimes hidden spending patterns. It also shows how spending even small amounts of money here and there adds up over time. As you observe these patterns, you’re able to choose what’s most important to your budget and eliminate frivolous expenses. Apps like Mint™ provide easy ways to keep track of spending and analyze what it is you spend your money on.

If the goal of budgeting is to spend less than you make, one of the best ways to do that is to save first. Instead of saving whatever is left over at the end of the month, set savings aside first and spend the rest. By getting money out of your pocket and into a savings account, you’re less likely to spend your savings over the course of the month.

Try Window Shopping

If you simply cannot resist the urge for retail therapy, try window shopping as an exercise of willpower. It’s possible you’re just looking for a way to pass the time and, in order to feel like you’ve accomplished something, think that you need to walk away with a product in your hand. Try it on for size. See how good you’ll look in it. Then put it back on the rack and return to the store next week if you truly must have it.

This sort of practice still gives you the entertainment you seek while shopping, but it also helps you avoid impulsivity – one of the most devastatingly maddening habits for your budget. Impulsivity is rarely your friend, especially if you’re hoping to have a healthy relationship with your money. And let’s be honest… you are. Those impulsive, extraneous purchases are actually compounding your stress rather than alleviating it. Think about all your hard-earned dollars and how many hours it took you to be able to afford that $150 purse. How quickly it vanishes with a single swipe of a credit card.

Budget Planning IS Freedom

Finally, the most important budgeting tip is to make sure you properly understand the nature of a budget. A lot of people have misconceptions about budget planning and feel that a budget will limit their ability to do what they want, when, in fact, the opposite is true. Budget planning IS freedom. Mindless spending is far more limiting than proper budget planning, and you’ll likely play an anxious game of catch up rather than calmly putting one foot in front of the other as you proceed through the year. When you learn how to budget your money properly, you’re the master of your money and are able to adjust it accordingly. Remember, there’s no perfect budget out there. It takes practice, and you are ultimately the only one who gets to decide what works best to help you achieve your financial dreams.

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