Nearly two-thirds of Aussies admit comfort spending is putting pressure on their budget.
Since the beginning of the pandemic, comfort spending has become an increasingly more common phenomenon. Now, with 2022’s rising consumer prices, supply chain issues and inflation, financial pressures might simultaneously push people to seek emotional relief in comfort spending while also making said spending more destructive than ever.
According to Mozo research, 86% of Australians regularly indulge in comfort spending, with more than a third (37%) doing so at least weekly.
Australians are comfort spending to the tune of $39 billion annually, with almost two-thirds (65%) of people saying their comfort spending habits are putting their budgets under pressure.
So what is comfort spending?
Comfort spending, similar to comfort eating, is spending taken on in order to make yourself happier.
What drives comfort spending
Research shows that there are three main factors that drive comfort spending:
- stress and
To a lesser extent, loneliness and specific triggers such as a fight with a loved one or a bad day at work can also be contributors.
Once one or more of the triggers have been tripped, the comfort spender seeks solace in a purchase they hope will cheer them up. There was a time when that required leaving the house and visiting a shop, but times have changed and a comfort purchase is now just a click away for most.
What are comfort spenders buying?
There are a number of items that capture the attention and wallets of comfort spenders but two of the biggest three were our old friend’s food and clothing.
As many as 47 per cent of those surveyed have bought takeaway food for comfort, while 46 per cent admitted to chocolate being a go-to purchase. Clothing was the only item that scored higher, with just under half (49 per cent) of respondents buying clothes to boost their mood. Other items which featured prominently were alcohol, gadgets and cosmetics also featured prominently in responses.
Another concern is how these comfort purchases are being made with over 64% of comfort shoppers using credit cards or buy now, pay later services such as afterpay.
So how can we cut back on comfort spending?
The Inspired Money Team came up with these tips to help curtail unnecessary spending:
- using a money management app (try our Wealth Portal).
- unsubscribing from marketing emails
- incorporating comfort spending into your budget
- seeking an alternative, healthier ‘comfort’ option such as walking or keeping a diary
Like most things that involve changing habits most things are easier said than done, but they may help you cut down on your short-term comfort spending and help you to be more comfortable in the long term. If you would like to chat about this or look at working with one of our Money Coaches who will work with you on your budget and behaviours book a session with any of the Inspired Money Team on 08 6222 7909.
Written by the Founder & Money Coach Conrad Francis.