Impulse Buying: The Dopamine Trap That Drains Your Wallet

People spend on various things throughout the day, from necessities to feel-good items. Spending is a normal part of the day; we usually don't sit and think about how largely it affects us and our finances. But why does buying these miscellaneous items make you feel happier? They may not last as long, nor do they provide you with ease or comfort, so why are these expenditures so recurring?

The psychology behind spending money outside of needs involves emotional triggers, such as using shopping for temporary mood improvement and chasing dopamine boosts. There are two factors to why this can happen - social and environmental influences go hand in hand with emotional and psychological drivers when it comes to emotional spending.

Social and Environmental factors

• Social media and social status: Seeing a product that was shown in an Instagram reel as 'trendy' in a shop and for much cheaper, is also a factor that pushes people to buy that product. This gives the person a sense of inclusion and a sense of belonging, be it to a trend as well.

• Upbringing and relationship with money: A person who has been raised in a comfortable environment is more likely to splurge and indulge in activities like such. Whereas someone who hasn't is more mindful of their expenditures and spending habits.

Emotional and Psychological drivers

• False dopamine reward: Impulse buying and even the anticipation of a purchase can release dopamine. Impulse buying triggers a dopamine release in the brain's reward system, which creates a feeling of pleasure and instant gratification that reinforces the behaviour. The positive feeling you get reinforces the habit and makes you do it again the next time.

• Self-worth and compensation: Spending, particularly on luxury items, can be an attempt to compensate for feelings of insecurity, inadequacy and other negative experiences.

Ways to stop emotional splurging

• Identify and address your triggers, implement a cooling-off period of 24-48 hours, during which you won't buy anything and by the end of it, the realisation that it wasn't a need sets in.

• Find non-monetary rewards: Replace shopping with activities that provide emotional release without costing money. Exercising, spending time with friends and family, taking a warm bath, pursuing a hobby.

• Unsubscribe from marketing emails: Having e-commerce apps on your phone is fine, but it's the notifications that cause a panic in the consumer's mind. So turning away from those emails, messages and pop-ups from your phone is one of the sure short ways of stopping these purchases.