Compensatory Buying: An underlying mindset in Shopping Addiction and Overspending
Studies have confirmed our increase in spending during the pandemic (click here for a blog post on recent literature confirming those trends we all saw first hand).
More recent studies are showing the mentality behind that spending.
An article by Lins, et al. (2021) elaborated three types of spending seen during the pandemic and classified two of them as the most prominent:
Compulsive/Impulsive Buying
Panic Buying
Revenge Buying
Of these three, the authors classified Panic Buying and Revenge Buying as the two most prominent during the pandemic and categorized both of them under an interesting umbrella — Compensatory Buying.
Compensatory Buying is when you are buying things to ease some sort of discomfort. It is similar to Compulsive Buying in that way (as compulsive buying behavior can feel like it provides a release of anxiety/stress in the moment). However, the marked difference between Compensatory and Compulsive Buying is that the Compensatory Buying feels quite justified to the spender.
Let’s look at some examples provided in the article:
Panic buying — When goods were scarce and obsessively purchased and sought out. Toilet Paper? Hand Sanitizer? Didn’t we all (to a certain degree) engage in a sort of urgent buying at the beginning of the pandemic?
Revenge buying — Once brick & mortar stores re-opened, this sort of behavior was seen especially in the luxury goods sector. People purchased items that they felt they deserved. Another term for this might be Grief Buying, ‘I’ve been through hell and back and damnit, I am buying this Gucci bag because YOLO.’
You can see how these ideas make sense, especially during the uncertain times of a global shut down and pandemic.
However, you can also see how this event may have shaped our spending behavior.
Reflect back on your own post-pandemic spending (i.e. the years 2022 and into 2023)… do you still see tinges of Panic Spending? Revenge/Grief Spending?
Are these ways of spending impacting your relationships with your spouse? Keeping you from putting money into retirement? Pushing back long-term goals?
Financial Therapy is a way for you to work through the feelings that drive this type of spending and start using money the way you want to be using it (rather than as a fleeting relief system).
If you or someone you know might need help with this, have them give me a call! If I am not a good fit, I will help them find someone who is.
DrZepeda@FinancialTherapyTexas.com
Phone: 713-291-9553