The psychology of splurging: Why we overspend and how to stop
Written and accurate as at: Jan 14, 2026 Current Stats & Facts
Overspending is often framed as a self-control issue, but research suggests it’s rarely that simple. Our spending habits tend to be shaped by a mix of social pressures, emotional triggers, and issues of identity and self-worth.
Add to that the convenience of online shopping, which has put a seemingly infinite catalogue of goods at our fingertips, and it’s become easier than ever to spend without thinking.
If you or someone you know struggles with overspending, it helps to understand the underlying causes. And once you know what’s driving the behaviour, it becomes a lot easier to regain control.
The dopamine hit of a sale
Sales are designed to drive up purchases, and particular times of year are known for widespread discounts. Cyber Monday, Black Friday and Boxing Day are just a few, though promotions and discounts can continue for weeks (as anyone whose inbox has been flooded with advertising would know).
Shopping during a sale can trigger a particularly heightened dopamine response, as the anticipation of scoring a great deal can make a purchase feel even better. What’s more, loss aversion – in this case, the fear of missing out on a discounted item – can also cause us to make irrational decisions, like buying something we don’t even want or need.
Keeping up with the Joneses
Spending to keep up with others can take many forms: think upgrading your phone sooner than planned or buying a new outfit for an event, even though you already have a closet full of items you could wear.
It’s an unfortunate development but this is often triggered by social media. When your feed is full of snapshots of other people holidaying and enjoying regular nights out, it’s easy to feel inadequate. And even when you know these images have been curated and don’t reflect reality, they can still impact your self-worth and spending choices.
Difficulty controlling the urge to shop
Psychological research tells us that retail therapy can provide feelings of happiness and relaxation. It can even give us a boost of motivation, like when we buy a new pair of trainers to encourage us to stick to that New Year’s resolution to start jogging. But it is possible to take retail therapy too far.
While it’s not currently a medically recognised disorder, compulsive shopping mirrors one that does actually feature in medical handbooks: gambling addiction.
Just like in gambling, the ‘win’ – the delivery of a package or buying a new product – often isn’t the most satisfying part. Rather, it’s the anticipation that comes with filling a shopping cart or placing an order that spikes dopamine, leaving the shopper in an endless cycle of chasing the next high.
When shopping becomes the main way a person copes with stress or feelings of unworthiness, an unhealthy dependence can develop. Signs might include feeling out of control when shopping, spending beyond your means, or making purchases that don’t match your values in the slightest.
Ways to get on top of your spending
- Try creating a simple budget. Even a rough understanding of fixed costs, flexible spending and savings goals can make overspending easier to spot and address early.
- Put some distance between yourself and a purchase. Pausing for at least 48 hours before buying something can counter that feeling of urgency and give you time to consider if it’s something you really want.
- Spend some time writing down your financial priorities. If it’s important to you to spend time with friends and have new experiences, this might mean allocating money for social activities but cutting down on other things, like clothing.
- Reduce the time you spend on social media, or unfollow influencers who regularly promote products and sales. Less exposure to triggers can make it easier to stick to spending goals.
- Share your goals with supportive friends or family. Being open about your financial goals can build motivation and help keep you accountable.
- When shopping during a sale, limit yourself to items you were planning on purchasing anyway. If something else catches your eye, ask yourself if you would still want it if it was full price.
Everyone makes the occasional financial misstep, but when it becomes a habit it can wreak havoc on your wallet, relationships and overall wellbeing. If you’re having trouble breaking the cycle, consider seeking support from a financial counsellor, therapist or trusted professional.