Christmas is approaching, and for many, economic stress is increasing. Paradoxically, this can lead to purchasing even more gifts. New research from the University of Skövde shows that financial anxiety and stress trigger impulsive buying. “It’s a way for people to find temporary relief from negative feelings about their finances,” says Jalal Ahamed, Docent in Business Administration at the University of Skövde.
Anxiety about our finances can lead us to buy even more Christmas gifts. This is shown by new research from the University of Skövde.
Shop windows and online retailers are now ready, enticing customers with everything from yoga-compatible scented candles to AI-controlled toothbrushes. Some look forward to the hunt for gifts, while others feel a growing knot in their belly. The financial pressure is mounting, and unfortunately, it can lead people into an even worse financial situation.
New research from the University of Skövde indicates that financial anxiety and stress can trigger compulsive and impulsive purchases.
"Christmas often amplifies financial anxiety by increasing consumption expectations. This can lead to more impulsive buys that serve as a form of temporary relief from the anxiety. This risks creating a negative spiral where further financial stress leads to even more impulsive spending," says Jalal Ahamed, Docent in Business Administration at the University of Skövde.
Christmas Makes Us More Vulnerable
Financial anxiety relates to how we feel and think about money, which is often influenced by our financial situation and past experiences. It’s a prolonged concern about personal finances, which an individual may experience over an extended period and distinct from a temporary worry about money.
Low income, multiple children, and high debt levels are factors that heighten anxiety. Poor money management habits and certain personality types can exacerbate the situation.
With all these factors at play, the festive season can be a challenging time for many as stress and consumption demands increase. Impulse buying is, unfortunately, just one of several negative effects of financial anxiety. Research shows that it also impacts our mental health, relationships, and quality of life.
"It harms family relationships and our health while weakening social cohesion, often leading to increased isolation. Financial anxiety has a profound impact on individuals, families, and society as a whole," says Jalal Ahamed.
Jalal Ahamed, Docent in Business Administration at the University of Skövde, compares financial anxiety to a phobia and says it is important to confront it to overcome it.
Comparable to a Phobia
However, it can be challenging for many to address their finances. Many cope with the problems by burying their heads in the sand. Jalal Ahamed explains that financial anxiety can be likened to a phobia.
"We often avoid our phobias. This may provide a temporary sense of security, but in the long run, it can limit our opportunities. Similarly, financial anxiety can lead us to avoid checking our finances or addressing financial problems, which can create even larger issues over time. Confronting our phobias, even when it feels uncomfortable, can be an essential part of overcoming them."
Read More About the Research
The research on financial anxiety was published in the International Journal of Bank Marketing under the title: Financial Anxiety: A Systematic Review.
