Retail therapy offers a thrill, but how do you know if you’re taking it too far?

It’s all about balance

The most recent RBC Consumer Spending Tracking found that Canada is likely on track for a slight uptick in per-person retail spending for the first time since mid-2022. It’s likely no coincidence that this rise coincides with the steadying of inflation rates.

After being on financial edge, Canadians may want to participate in some revenge spending. In other words, they want to splurge in places where they’ve been pinching pennies previously.

Ed Coambs, a financial therapist in Matthews, N.C., and author of The Healthy Love & Money Way, says online shopping has made it easier — and more enticing than ever — to spend with abandon.

Coambs points out that marketing teams use neuroscience to develop platforms and content that trigger chemicals like dopamine when you shop.

“Their job is to get us to consume as much of their material, their ideas, their services, their goods,” says Coambs. “And often, there's some unmet psychological need there that shopping is fulfilling for us.”

The trouble, he adds, is that this feeling of fulfilment doesn’t last, because you’re not actually getting what you need. While there’s a time and place for shopping — Coambs himself loves buying himself something new — he always looks for physical cues that he’s not overindulging.

“I want to be able to do it in a way that I don't start to feel guilt or worry or [have] anxiety,” says Coambs. “If you have those things happening, psychologically, that’s a sign that something is out of balance."

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Many Canadians are on the right path

For many Canadians who’ve indulged in a little revenge spending, the occasional spree shouldn’t knock them off track financially. That being said, there’s definitely room to grow for Canadians and their personal finances.

In fact, a study from The Angus Reid Institute in November 2024 reported that only 53% of surveyed Canadians are satisfied with their personal financial situation. If spending is getting in the way of you being satisfied with your finances, it might be time to make some changes.

What to do if your spending is getting problematic

While many are managing to strike a good balance, there are a few red flags to watch for that might indicate your habits are starting to threaten your financial security.

One of the first signs will be if you’re suddenly finding it hard to keep up with your monthly bills.

From a credit perspective, paying your monthly bills is critical. Missing or late payments will be a red flag for future creditors and make it harder for you to get everything from a new credit card to an apartment.

You can combat problematic spending by simply being intentional when you're making purchases and adhering to a budget so you don't overspend and end up unable to pay your bills.

“Just be mindful when you go to any checkout,” says Coambs. “Whether it's digitally or in person, just look at the number and watch what happens to you psychologically — you're going to have an automatic feeling.”

If your gut says you got a good deal, great. However, if you hesitate for any reason, maybe it’s a moment to reflect on whether this purchase lines up with your goals. Coambs encourages taking a walk to clear your mind.

It might sound simple, but he says the movement of putting one foot in front of the other is proven to help balance and stimulate reflection, It can help most people figure out what they need at that moment.

But Coambs adds that for some who have experienced trauma — especially family conflict around money — they’ll be especially prone to problematic relationships with money. Whether it’s creating a budget in writing or seeing a therapist, Coambs says a little help can make this problem much easier to manage.

“Building in the reflective process of looking at a budget and your spending can help you as you’re trying to find that happy medium of how much to spend,” says Coambs. “The reality is life is more complex and dynamic than our budgets lead us to believe it should be.”

Sources

1. RBC: Consumer Spending Tracker (December 2024)

2. The Angus Reid Institute: Great Expectations or Bleak House? Most Canadians are happy, but life outlooks have worsened over past decade (November 2024)