What is meant by emotional spending?

Emotional spending refers to the practice of making purchases driven primarily by emotions rather than by rational needs or practical considerations. This behavior often occurs when individuals buy items as a way to cope with feelings such as stress, sadness, happiness, or loneliness. For instance, someone might purchase luxury items to celebrate a good day or to placate feelings of sadness after a challenging event. This type of spending can lead to financial strain if it becomes habitual, as it typically involves buying things that are not necessarily needed and can lead to accumulating unnecessary debt.

Other options do not align with the definition of emotional spending. Purchasing decisions made purely based on logical calculations would imply a rational approach, while spending limited exclusively to essential items reflects a minimalist strategy focused on necessity rather than feelings. Similarly, making financial decisions solely based on market trends represents an external, analytical approach, detached from emotional influences.