Emotional spending costs £26.5 billion in credit card debt

Broken heart

Break-ups, retirement or bereavement are triggering spending sprees among millions of Brits, who are racking up hundreds of pounds in credit card debt - and in some cases end up in serious financial difficulty.

A study by Asda Money found that19 million Brits send for purely emotional reasons, with 1.8 million going on a spree after a break-up, 1.9 million spending to deal with the emotional impact of retirement, and 2.4 million overspending when dealing with a death. An astonishing 5.5 million people spend most when they are feeling unhappy.

A third of people spend this cash on a holiday they cannot afford, while some will embark on expensive home renovations or buy a new car. Others will try for a new look - with new clothes and a haircut, while some will buy a new pet.

The average spend is £300 - but this masks instances where people spend thousands of pounds to help them get a hit from sending, and distract themselves from the bigger issues going on in their life.

A worrying one in three people suffered financial difficulties as a result of their spending, and one in ten are still feeling the effects. Even when they have recovered from it, 43% of people felt guilty about the money they wasted.

Karen Harkin, Head of Asda Credit Card, said: "While it is perfectly reasonable for credit card holders to spend on credit following impactful life events, careful spending is key. With the right financial guidance and methods in place, shoppers can overcome the urge to overspend and avoid that unpleasant feeling of guilt."

See also: Valentine's Day rip-offs

See also: Families face budget squeeze as spending on essentials hits three-year high

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If you are going through emotional difficulties - especially with Valentines Day on the horizon - it's therefore important to set some ground rules to protect yourself. There are five useful steps.

1. It may be better to actively decide not to touch your credit card for a couple of weeks. Take it out of your wallet and put it somewhere safe.

2. It's also a good idea to decide not to buy anything significant for while - regardless of how you buy it. Now is not the time to be making big decisions - and that includes spending decisions.

3. Avoid temptation. When you're feeling low, stay away from the high street and off shopping websites. Go for a walk, call a friend, write a chart-topping hit about your break-up - just don't go anywhere where you can spend money.

4. If you then want to buy something, make a pact that you will sleep on any purchasing decisions, to see if it still feels essential the following day.

5. If you struggle to stick with any of these rules, then ask a friend to help you. You can call them before any purchase, and they will help either talk you out of it or confirm it's something you genuinely need.

Most common causes of debt
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Most common causes of debt

There are some very common reasons for building up problem debts. Here we reveal seven of the most common, and what you can do if you face them.

Unemployment or illness that means one or more of the household’s earners are unable to work will bring a profound change in family finances, and according to the Money Advice Service is the most common reason for getting into problem debt.

If your circumstances change, therefore, you need to immediately address your family finances, and put everything on a minimum spend lockdown. You should also look into the benefits and tax credits that are available sooner rather than later, to try to close the gap.

If you are on the kind of contract that means varying hours, it can be incredibly difficult to work out what you can afford to spend - making it the second most common reason for getting into debt - according to the Debt Support Trust.

Rather than swinging through the extremes from week to week, the best approach is to establish a budget that will work in the leanest of months, so you don't find yourself getting used to the months when you work more hours.

According to Citizens Advice, trying to service too much debt is the third most common reason for getting into difficulties. The TUC found that those with problem debts spend 40% of their income on debt repayments.

If you are in this position, you officially need some help with your debt problems. If you continue to rob Peter to pay Paul, you will end up owing more and more, so you need to take stock and talk to a debt charity about all your options.

The double-whammy of the legal bills combined with the incredible cost of establishing two separate households is enough to make divorce or separation the fourth most common reason for going into debt - according to the Debt Support Trust.

There's no easy solution, but if you are going through this, it can be helpful to talk through your financial situation with someone you trust or a debt charity, who can help you balance a stretched budget.

Problem debts aren’t necessarily caused by a sudden shock to the system. According to the Money Advice Service, 20% of their clients are simply trying to live on an unsustainably low income.

If you are in this category, it’s important to seek help on the benefits and tax credits you may be able to receive. It’s not always easy to navigate the system, but charities like StepChange have experts on the benefits system who can talk you through what’s available.

The combination of rising costs and stagnating wages over the last few years has meant increasingly people saw their monthly wage cover less and less of their monthly outgoings. This position has started to ease more recently, but has left many people far worse off than before the financial crisis. The Money Advice Trust said a combination of this and unexpected costs was responsible for almost one in ten problem debts.

If you consistently spend more than you are expecting, it's well worth keeping a spending diary. That way you can establish the real cost of living, and start to identify where you can cut costs.

The Money Advice Service says it commonly deals with individuals who have struggled to get to grips with budgeting and debts, and have got into debt because they don’t have the skills and knowledge to manage their money effectively.

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