Are you guilty of comfort overspending? Two-thirds of Aussies admit comfort spending is putting pressure on their budget

It’s been a hard couple of years and comfort spending is on the rise.

Have you spent too much on too many nights out, splurged on an unnecessary pair of shoes, or simply grown to rely on food delivery services in place of the homemade meals you used to enjoy? You might be a ‘comfort’ spender.

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 new 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.

This is a 12% increase from the 2021 Comfort Spending Report findings, where just over half (53%) of Australians admitted comfort spending was putting their budget under pressure.

Do you find that you spend more money on frivolous things when you’re feeling down or stressed? You’re not alone.

Worryingly, negative emotions are heavily linked to comfort spending. Mozo’s research found that boredom (44%), stress (41%) and unhappiness (35%) are the most common reasons Australians turn to this expensive habit.

“As interest rates rise and cost of living pressures increase, comfort spending could be a recipe for adding additional stress to household budgets,” says Tom Godfrey, Mozo spokesperson.

“Although Aussies might be tempted to purchase their way out of the winter blues, slashing the cash on eating out or the latest fashions could leave them in the red and feeling the pinch.”

“If comfort spending is getting a little out of control, breaking this habit could be as simple as recognising triggers and finding less costly ways to improve your mood without blowing the budget.”

What are we buying when we comfort spend?

People turn to comfort spending to lift their moods, so it’s not surprising that Aussies’ go-to vices are:

• Chocolate (46%)

• Clothes (49%)

• Takeaway food (47%)

• Alcohol (30%)

• Junk food (38%)

How much are we comfort spending?

As a nation, Aussies are splurging a whopping $39 billion on feel-good purchases, which averages to $2,274 per year per person.

25-34 year-olds are the biggest comfort spenders, spending $2,864 a year, 16% more than 35-44-year-olds who spend $2,407 a year on average.

How are we paying for our comfort spending?

The data shows that almost half (48%) of shoppers pay for comfort spending outright with their debit card or EFTPOS cards, while others use credit cards (34%) or Buy Now, Pay Later services (BNPL) (30%), breaking down purchases into smaller payment instalments.

“While credit cards and BNPL services can be a good way to buy higher-priced items, it’s important shoppers set a budget and plan out purchases to help ensure they are living within their means and they don’t get caught up paying off interest or late repayment fees,” Godfrey says.

To save yourself from future financial pain, you can curb the comfort spending habit instead of blowing your budget or loading up debt on your card or BNPL service. Here are some top tips:

Mozo’s top 4 ways to keep comfort spending under control

1. Out of sight, out of mind - Given that almost half of us like to comfort spend out of boredom, it can help to remove the temptation by unsubscribing from any marketing emails. This prevents you from casually online shopping whenever you get a new alert.
2. Have a dedicated savings account for comfort spending - If comfort spending is a habit you don’t think you can shake, then it could be worth setting up a dedicated account just for little splurges. This way, you won’t run up debt or blow your budget when the urge to shop takes you.
3. Avoid comfort spending on credit - It can be too easy to overspend on a credit card or BNPL service that delays billing. There’s nothing worse than paying your balance off - plus interest - on purchases made on a whim, weeks prior. To avoid this sting, opt to only comfort spend with money you already have.
4. Try to find an alternative - As the name suggests, comfort spending often stems from the need for self-comfort when you’re feeling down or stressed. So, if you are trying to curb impulse buying this year, finding a comfort spending alternative could be the most budget-friendly option. This could be as simple as going for a walk, meditating or calling a friend.

Ready to get yourself set up with a comfort spending savings account? You can compare various options by checking out our high interest savings account comparison tool.