Flights are flying!
Diners are dining!
Rock stars are rocking!
All the canceled events of the pandemic are returning and America is finally starting to reopen—and so are people’s wallets, apparently with plenty of cash to spend.
Post-Pandemic Saving and Spending
Nearly 80% of Americans reported saving money in 2020 just by not going out to eat ($245 savings), not going on vacation ($1,400 savings), and not making major purchases ($5,700 savings)!1 All that, combined with a few extra thousand dollars from stimulus checks, has Americans sitting on a whopping $2.6 trillion dollars in excess savings.2
But now, after far too many days stuck at home hoarding cash (and toilet paper), many of us are ready to sprint into our post-pandemic freedom—full splurge ahead! Spending is already up 6.4% in the first quarter of 2021 (that’s with many states still under pretty tight COVID-19 restrictions), and it’s only expected to go up.3 People are practically running into businesses and begging them, Take my money!
Whoa, slow down there, tiger. This post-pandemic overspending trend is called revenge spending. And right now, it’s looking pretty dangerous for your financial well-being.
Uh, What Is Revenge Spending?
In simple terms, revenge spending is buying things just to make up for all the spending you didn’t do during the pandemic. Now that millions of Americans are getting vaccinated and life as we once knew it is coming back into focus, people have decided they’ve got a vendetta against the economy for shutting down. And apparently the best way to get vengeance is to spend all their money!
Right . . . because that makes sense.
Revenge spending comes from this itch in your wallet that you feel like you’ve just got to scratch. It’s kind of like another feeling Dave Ramsey coined a long time ago called Stuffitis. Stuffitis is when you feel like you need to buy aaaaall of the stuff to make yourself feel better. And after this long depressing season—filled with disease, loss, isolation and disappointment—we could all use some cheering up.
But splurging is not the best way to get vengeance on the pandemic for closing and canceling everything and ruining all your fun. And the problem with revenge spending and stuffitis is that neither will bring you long-term happiness.
That being said, you’ve been through some hard times and you saved responsibly, so you should be able to buy some things that make you happy! Let’s just figure out how to revenge spend responsibly and not jump off the post-pandemic overspending deep end.
7 Tips to Avoid Overspending Post-Pandemic
1. Let the budget be your guide.
We’ve all been living in the same really strange science fiction novel, and it’s understandable that you (like many others) want to go shopping, eat at restaurants, travel, and do all the things you used to enjoy back in the day when masks were only seen on Halloween.
We get it. We all get it. But just because you haven’t been able to dress up and hit the town in a billion years doesn’t give you permission to throw your budget out the window and fall for impulse buys. Challenge yourself to live by this motto: If it’s not in the budget, it’s not happening. Plain and simple.
And remember, the budget doesn’t have to be like a taser zapping you every time you try to reach in your wallet to spend some money. Set aside some cash for fun spending! Give yourself an allotted amount for new clothes, a concert with friends or date night at a fancy restaurant. Just maybe not all three in the same month.
Start budgeting with EveryDollar today!
And if the word budget stresses you out, use our free app, EveryDollar. It’s a fun and easy-to-use tool that gives a job to each dollar in your budget. No complicated spreadsheets here!
2. Unsubscribe to retail emails.
It seems like everybody has been having a sale for months and months now. You’ve noticed it too, right? Email after email is flooding your inbox, letting you know there’s a sale out there with your name on it. Every company wants you to come and help out the economy by buying stuff from them. How thoughtful.
Hey, they’re just trying to make sure their business stays afloat in these weird times. And that’s totally fine! But if you’re trying to steer clear of spending temptations, know that you’ve got the power to use that unsubscribe button.
3. Shop small.
If you do have some extra cash in the budget and want to help support businesses, shop small! Head to the local stores that were forced to close for months. You know, the ones that don’t have the luxury of sending you emails that redirect to their online store.
How does this help the urge to splurge? Shopping in person is an easy way to make sure you don’t get too crazy with spending. Leave the debit card at home and take a set amount of cash with you. That way you stick to the budget and you help a local business owner avoid any charge fees. It’s a win-win.
4. Invest.
Did you save an extra $1,000 during the pandemic? $5,000? $10,000? No matter how much you saved, you can make that dollar amount grow.
Throw that extra money into an investment account and watch it double, triple, even quadruple for years to come. Sure, you might miss out on joining your friends in the post-pandemic splurge. But you’ll be glad you chose to invest when you retire a millionaire. Now that’s a glow-up!
Not sure how to start investing? We recommend working with an investment professional. Because investing is extremely personal, find a trusted investment pro in your area who can help create a plan that’s right for you.
5. Let go of comparisons.
Did your next-door neighbor spend their stimulus checks on a kitchen remodel (and they tell you all about it any chance they get)? Did your in-laws already book a trip to an all-inclusive resort in Cancun? Take a page from Frozen’s playbook on this one and let it go.
Comparisons, aka keeping up with the Joneses, will eat away at you if you’re not careful. It’s a slippery slope, and spoiler alert—it doesn’t lead to anything good. You’ll start noticing all the things you don’t have instead of being grateful for the things you do have. And at the end of the day, all that does is create a heart full of unrest instead of a heart of gratitude.
6. Take a break from social media.
You don’t have to go far (or even leave the couch) to feel the bite of the comparison bug—thanks, social media. Think about it: You’re minding your own business, scrolling through your newsfeed, when a photo of someone’s latest new tech gizmo, super hip room décor or brand-new home pops up. At first, you’re genuinely happy for them, but then that twisty feeling hits you in your gut. You start to think about how you don’t have those things—and how much better your life would be if you did!
And social media marketing doesn’t help either. Ads target you based on the things you buy, the people or businesses you follow, and even your search history! Yeah, it’s pretty creepy when you stop and think about it. So, if you’re trying to keep overspending at bay, consider a social media break or at least limiting your time on it.
7. Practice delayed gratification.
All right, you’ve stayed at home for months. You’ve learned how to live without seeing other people, going to a salon, or wearing real pants. You even learned how to ration the toilet paper. It’s safe to say you’re somewhat of a pro at delayed gratification now. It’s pretty easy to “do without” when you’ve gone without.
If you’re trying to avoid splurging post-pandemic, then keep right on with delaying the gratification. What’s that look like exactly? For starters, wait at least 24–48 hours before making a purchase (so you can really think about it). And maybe you need to start a sinking fund to save up for the expense you want.
Things People Want to Splurge on Post-Pandemic
Have you been making a dream list of some things you want to do post-pandemic? You’re not alone! Here are some things people can’t wait to splurge on:
- Expensive meals
- Salon treatments
- Home repairs or remodels
- Traveling
- Cars
- Clothing
- Furniture
We get it. We all feel like we’ve been stuck in a box for far too long, but don‘t let that pent-up lack of spending lead you to do some serious retail therapy that you’ll regret later.
Don’t Blow Your Savings
If you did tuck away a lot of money during the pandemic, take that money and keep plugging away at the Baby Steps (once things start to look stable for you). As life gets back to normal, make it a point to remember to live like you did during this season—being thankful for what you have, living on less than you make, and favoring saving over spending.
Nearly 80% of Americans say they want to continue to save more and spend less post-pandemic.4 And the great news is you can! For years, we’ve been helping people (almost 10 million people, to be exact) get their money to work for them, kick debt to the curb, and save for the twists and turns of life.
Right now, you can learn the proven money plan with Financial Peace University (FPU). Find out how to be financially-prepared—no matter what’s happening in the world. It’s time to make your saving goals a reality!
Read the full article here
