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Your Guide to Improving Your Financial Health


It all began with a few small purchases I didn’t need. I remember the feelings so vividly. Whenever I felt stressed, sad, or anxious, I added multiple items to my online shopping cart and clicked the checkout button to self-soothe. 

“When we are stressed out, our body craves a form of release,” says financial educator Eduek Brooks. “So we turn to things that make us feel better.”

Initially, it did feel satisfying to have new things and to indulge myself. But gradually, I began to feel guilty about how much money I was spending. And as time went on, I began to feel even more anxious and depressed about my situation. 

What is Overspending?

Generally speaking, overspending refers to spending more money than one can afford or more than was planned. Overspending can stem from various factors that may be within or outside of your control. Common causes of overspending within one’s control include underestimating expenses, mismanaging cash flow, and not planning adequately for future expenses. External factors, such as rising inflation and high-interest rates on loans or credit cards, can also contribute to overspending. All these factors can make it challenging to manage your finances, even if you’re being responsible with your money.

While some people may overspend occasionally, overspending can become chronic if you become consumed with spending without a real rationale or making purchases to feel better as a coping mechanism.

Overspending can also show up as buying items without a need or purchasing several versions of the same product. It can also look like feeling guilty or disappointed after making a purchase or having little value for purchases after acquiring them. Hiding purchases from loved ones or experiencing relationship issues due to your spending habits may also be a red flag.

Other signs of chronic overspending may include:

  • Finding more pleasure in the act of buying than from owning the purchased items
  • Failing to use everything you buy
  • Feeling restless or exhilarated while shopping
  • Believing that the next purchase will have a transformative effect on your life
  • Having multiple credit cards or loans and being obsessed with spending without a real rationale
  • Experiencing mood dips or anxiety when unable to spend or complete purchases
  • Continuously ignoring adverse outcomes or consequences from your spending habits which may indicate denial. 

How Poor Mental Health can Influence Overspending 

As I mentioned in my guest appearance on Moolala: Money Made Simple with Bruce Sellery, people don’t realize how closely mental health and spending habits are related. 

For some individuals, overspending can be a symptom of mental health challenges or disorders. For example, people with anxiety or depression may turn to shopping temporarily to relieve their symptoms, while those with bipolar mania, attention-deficit/hyperactivity disorder (ADHD), or suffering from addiction may experience a lack of impulse control leading to spending sprees.

These days it’s also more common than ever to overspend on items to gain social approval. While it’s not a sustainable way to manage your finances, there are real societal pressures to keep up with trends and maintain a particular lifestyle, especially if you struggle with low self-esteem. Media and advertising further contribute through marketing techniques that create a sense of scarcity to encourage impulsive purchases and fuel the need for instant gratification. 

Additionally, many people who have experienced trauma tend to overlook or not know that the negative behaviours or feelings they have around money can also contribute to overspending.

Our family’s financial habits, and even adulthood experiences, like job loss, grief, or divorce, can shape our relationship with money and spending.

Tips to Address Root Causes of Overspending 

If you find yourself overspending and struggling to stay within your budget, it’s essential to identify the root causes of this behaviour. Here are some practical tips to help you address the underlying triggers of overspending:

Study your spending habits

If you want to change your spending behaviours, you have to understand your spending habits.

“One of the first things I help my clients with is recognizing the factors that lead them to the purchase,” says Brooks. 

Her advice is to conduct a self-assessment by writing down every purchase you have made over the last couple of months and record the circumstances and feelings that led to each purchase. 

Reflecting on this and your values, beliefs, and priorities will help you determine what is most important to you. This can help you understand why you make certain purchases and whether they align with you before you make any decisions. 

Recognize your patterns and triggers

Breaking the cycle of overspending also starts with understanding what triggers you.  

When you pay attention to your emotional spending cues, you might notice that particular behaviour, experiences, or situations can trigger you to overspend. 

So understanding these patterns can help you take action to avoid a trigger or minimize the impact. Once you know the “why” behind the motivation, you can begin to audit your habits. 

“You can even develop rules for yourself,” says Parween Mander, money coach and the founder of the Wealthy Wolfe.

“Like waiting 24 hours before making big purchases or not allowing yourself to shop at certain times of the day.” 

Even if you occasionally struggle to stay within your set budget, being mindful of your triggers is a crucial step in the right direction.

Create a solution-based budget

Often when we budget, we focus on fixed and variable costs. But budgeting should cater to your unique needs too. 

This may also look like putting barriers and systems in place to help protect you from the negative outcomes of overspending. For example, Mander suggests her clients “create space” before purchasing by removing credit cards from online shopping or using a separate account labelled mental health for vulnerable moments.

“Not all spending is bad,” says Mander. “Whether it’s nails, weekly Starbucks, dinner with friends, or your partner, it’s okay to treat yourself occasionally.”

Replace shopping with a different coping mechanism

Activities like sex, working out, laughing, or listening to music can also release dopamine. 

If you’re trapped in a cycle of spending money to self-soothe, find other activities to make you feel good without breaking the bank. 

For the times when retail therapy is still on your mind, Mander suggests you create a list of affordable purchases that won’t harm your financial health but can give you a similar sense of pleasure. Also known as a “step-down purchase,” you can use this tactic when you want to spend.

Talk to a trauma-informed professional

The good news is that more and more financial professionals are embracing the link between mental health and money. You can also consult with a credit counsellor, financial therapist or certified trauma of money facilitator who is trained to approach financial issues with empathy and compassion, making them well-equipped to help you overcome overspending.

Thanks to such resources, I’m in a much better place today. I still enjoy shopping, but now I have safeguards to do it in moderation and with a clear mind. I’m grateful for the support and tools that helped me understand the root causes of my overspending and ultimately handle my finances and mental health better.


This guest article was contributed by Zandile Chiwanza, a personal finance journalist on a mission to improve financial health and wellness among Canadians.

She channels her financial savvy into a clear but thundering call to action: Get your mindset and your money right.

Her words have appeared in the Globe and Mail, CBC, Refinery29, and Young & Thrifty.

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