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What is Retail Therapy, Anyhow?



“Retail therapy” is a tongue-in-cheek phrase people often casually toss about, referring to the good feeling that can arise through shopping, a feeling that is often (but not always) short-lived. (This isn’t, it should be noted, an actual form of therapy!)

Sometimes, people pursue shopping therapy when they need to cheer themselves up, whether after a romantic breakup, a bout with the flu, or a tough day at the office. Other times, this kind of pseudo-therapy is used to celebrate a special occasion, perhaps a promotion at work or an engagement announcement.

This post will explore the psychology behind shopping for pleasure, versus shopping strictly for what you need. We’ll delve into ways in which retail therapy can be harmless and may be a release, along with some potentially negative impacts.

We’ll share tips on creating a budget that helps allow room for purchases that make you smile, as well as ways to free up your cash flow, and a strategy aimed to help dig yourself out of credit card debt that can arise with over-enthusiastic spending.

Retail Therapy Psychology

This kind of “therapy” is believed to be increasingly common in light of how easy it is to shop online, no matter the time of day or night and no matter what the weather looks like outside. But hard and fast numbers are hard to come by because people often hide this type of behavior when it gets out of control.

Forbes.com , though, did share study results indicating that 52% of people surveyed have shopped impulsively at least once in response to stress. Doing so once, of course, isn’t likely to cause significant harm, unless you’ve made a seriously large purchase that’s beyond your means. But what happens when impulse shopping becomes a habit? Where is the dividing line between harmlessly indulging and problematic spending?

PsychCentral.com shares a 2017 podcast where they looked at this question in depth, comparing the garden-variety of this kind of shopping to comfort eating. No, you’re not necessarily hungry, but that snack sure looks good, can be easily compared to No, you don’t need another pair of shoes, but doesn’t that pair over there look sweet?

Guests on the podcast examined reasons why people use shopping therapy, including some that are fairly harmless and, sometimes, even potentially beneficial. Splurging on a quality suit before a job interview, for example, might ultimately be a savvy decision if it makes you feel more confident. Or, buying a collectible that brings you joy may provide long-lasting pleasure, even though you don’t actually “need” it.

Shopping “therapy” can also serve as a bridge through a difficult transition, with buying new items for an apartment after a divorce serving as a good example. New kitchenware, if your spouse got the old set, may be a necessity, while art on the wall may not be—and yet, both can play a crucial role in easing a newly divorced person into his or her new life.

From Retail Shopping to Compulsive Spending


There are at least two ways to look at the dividing line between healthy spending and compulsive spending: psychological ones and financial ones.

As far as the psychology behind shopping, if this activity is bringing pleasure without causing problems in a person’s life, then that’s likely to be a healthy enjoyment of one’s money. But, if someone shops as a quick mood lifter to distract himself or herself when problems are occuring in his or her personal or professional life—and those problems aren’t addressed—then shopping may be part of a dysfunctional life pattern that could get worse if not addressed.

Once this pattern becomes compulsive or otherwise creates negative consequences, it may even cross over into a compulsive shopping disorder, also known as oniomania . People with this condition may genuinely struggle to control their ability to stop shopping.

This condition, as mentioned earlier, is believed to be fairly common, although accurate figures are difficult to come by because people struggling with this issue are often ashamed to admit the depth of their impulse shopping.

From a financial perspective, what is “overspending” or “overshopping” to one person may not be for another because no two people have the same income, savings or debts. So, the person who pays his or her monthly bills and puts money away for a rainy day before making impulse purchases is not the same as the person who makes the impulse purchase first, racking up credit card bills and needing to scramble to make ends meet—even if they make the exact same purchase.

Signs of a shopping compulsion, according to Psychology Today , may include:

•  Not opening your credit card statements or bank statements

•  Hiding your purchases

•  Lying about what you bought

•  Missing work or school to go shopping

•  Feeling guilt or shame about your shopping

Addressing Retail Therapy Challenges

Experian.com shares tips on managing the emotional component of overspending, including:

•  Know your emotional triggers, perhaps a certain mood, and avoid shopping during those times.

•  Track purchases made during emotion-based shopping and determine when you’re most vulnerable to over-spending.

•  If you aren’t sure if something fits your budget, wait 48 hours before deciding whether or not to buy.

•  Have a friend you can call when tempted.

From a financial standpoint, it’s crucial to make a budget and stick to it. In your budget, you can include whatever amount of discretionary spending you can comfortably afford and treat yourself accordingly.

Creating a Budget

To help you to create a budget, here are six simple steps to follow:

1.  Gather together your financial documents, including bank statements, credit card statements and so forth.

2.  Make a list of your monthly expenses, both fixed and variable, and then add in spending for items such as clothing, hobbies, dining out, and other entertainment.

3.  Make a list of your monthly income, including both regular amounts and varying ones (such as bonuses, dividends and account interest). Use your after-tax, take-home pay.

4.  List savings and investments.

5.  Create a budget that lists what comes in and what goes out. Find spots where unnecessary spending is taking place and tweak as needed. Are you putting enough money in savings? Again, tweak as needed.

6.  Monitor your baseline budget and modify it until it’s a workable plan.

As part of this plan, you can free up your cash flow by canceling subscriptions that you rarely use anymore, prioritizing discretionary spending, deleting what’s at the bottom of your list, and price shopping for better deals on insurance, phone bills, and the like.

Focus on a Clothing Budget

Next, we’ll take a look at one specific budgetary line—clothing—and share techniques to help you get more for your money, along with practical solutions to build a great wardrobe at a more affordable cost. Tips include:

•  Set aside money out of each paycheck to work towards building a quality wardrobe.

•  Start with basics and get more creative as your wardrobe comes together.

•  Focus on quality, not quantity, keeping all clothing streamlined and simple.

•  Consider buying classic pieces that will stay in style, rather than trendy pieces that come and go.

•  Check out stores like T.J. Maxx, Marshalls, and the like that often carry quality clothes at more affordable prices, as well as outlet stores.

•  Browse online for good discounts; for example, check out Groupon or Deal News .

•  Consider selling clothes you don’t wear on eBay and put the money you get towards your clothing budget.

•  Be patient! Like anything else worthwhile, building a quality wardrobe can take time.

Consolidating Credit Card Debt with a Personal Loan


If you’re putting increasing numbers of purchases on your credit cards, it’s easy to get caught up in a spiral of debt. That’s because most credit cards charge compounding interest, which means you’re paying interest on your interest unless you’re paying off your balance in full each month. To make matters even more challenging, this interest is often compounded daily. To find out the impact of accruing interest on your balances, you can use our credit card interest calculator.

One time-tested strategy to reverse the debt spiral is to consolidate your high-interest credit card debt into one low-interest personal loan. That way, you can potentially lower your interest rate and streamline your bill-paying procedures.

There are numerous advantages to consolidating your credit card balances with a personal loan at SoFi. For example, we charge no fees: No origination fees. No prepayment fees. No late fees. No fees whatsoever.

Plus, if approved, you can borrow up to $100k at competitive rates, easily and conveniently online, and you benefit from live customer support every day of the week. If you lose your job through no fault of your own, not only will we temporarily pause your payments, we can help you to find a new job.

Learn more about SoFi personal loans today.

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The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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