Episode #26: How To Avoid Revenge Spending After The Pandemic
Today on the How To Adult Show we’re going to be talking about something that’s very pertinent in today’s world as we’re opening up from pandemic lock downs, and that’s revenge spending, namely how to avoid it. Revenge spending is a term that describes the phenomenon of us all emerging from our pandemic at home hibernation bubbles, stretching our legs, rebuilding our social muscles, flexing our wallets and saying ‘YOLO! I haven’t spent money in so long and I’ve been so bored I deserve to take all the trips, and eat all the meals out, and go out with all the friends, and spend all the money because eff that pandemic business!’
It’s a real thing, it’s happened before, and while I definitely advise letting loose and indulging in a bit of revenge spending or a yolo vacation away from your 400 square foot live-work-eat-exercise-sleep condo, let’s also talk about ways to avoid wasting money and spending all of 2022 sitting like hoarders amid piles of stuff that we bought this year that we actually have no interest in.
What is revenge spending or yolo spending?
Revenge spending, also called YOLO spending is becoming a characteristic spending behavior of 2021. While on one hand lots of people lost their jobs, their income, and their security during the pandemic, and are still trying to recover from that, there’s a whole other group of people who kept their jobs, their income, and their security, and simply lost their outlets for spending money.
These people are now emerging from their downtown apartments with covid fattened savings accounts, peloton strengthened legs, hello fresh burnout, and an urge to replace their covid stretchy pants with a yolo shopping spree. As the New York Times said recently ‘Welcome To The Yolo Economy’.
Now, like I said before, I’m all for a bit of revenge spending. The pandemic sucked hard, still does, but it feels like we’re either nearing some sort of end. We’re also not about never spending money ever here at the How To Adult School. We’re allowed to be out and about, small retailers are actually allowed to be open again, fewer and fewer businesses are being deemed ‘non-essential’, so I say go forth, spend money, make yourself happy, and support the small businesses who need you at the same time.
BUT…..what have we learned about finances from the pandemic friends?
That being said, if there’s anything we all should have learned from the pandemic, it’s how unpredictable our world can be. Jobs and entire industries that we thought were stable collapsed overnight, traditionally stable employees were furloughed, parents had to quit or reduce hours at their jobs to take care of their school age kids at home. Anything can happen, and while we’re all out buying new jeans (that are maybe a size larger now) something that should be at the forefront of all of our minds is the importance of having a large emergency savings fund, and not blowing all of our savings with the assumption that we’ll get another paycheque next week.
Even if this pandemic hasn’t affected your work or your livelihood, look around all the other people who once had stable employment, and recognize that there is actually no such thing, it’s just a concept we’re taught as children and hold onto like a life raft as we wander through job fairs and look at post-gratuation career opportunities that we don’t really enjoy, but they’re ‘stable’ and ‘pay the bills’. I digress though, this is not an episode to pick apart the way we view employment, but rather to provide you with 5 easy and actionable tips that will help you avoid splurging all your Covid savings on one epic yolo spending spree this year. Future you will thank you for watching this video.
How to avoid revenge spending tip #1 is to re-evaluate your budget.
Even if you don’t use a traditional strict budget, take a real honest look at what your life costs now. Don’t rely on the numbers of what your life cost before the pandemic, or what your life cost during the pandemic. Our living costs have fluctuated drastically over the past 18 months, and you need to re-evaluate how much everything costs.
Chances are you’ll be driving more again and will have a higher fuel cost than you did in deepest darkest February this year; also, have you seen the price of fuel recently? It’s definitely going to cost you more than before the pandemic.
Re-evaluate how much you’re going to spend eating out, whether this means you’ll be spending more on food to go at the office again, or less on eating out because you’re no longer choosing to spend a portion of your income every single week resolutely supporting your favourite local restaurants. Your spending habits have likely changed, a lot, and it’s best to just spend some time re-evaluating your budget, before trying to balance your numbers when they’re out of balance later.
How to avoid YOLO spending tip #2 is to make sure you’re building enough ‘fun money’ into your budget.
You’re going to want to have some fun, so just plan ahead so you don’t feel guilty about it. Buy that vintage flapper dress to wear to a ‘repeat roaring 20’s party’, go out for an extra coffee date with your friends each week, take weekend trips to nearby tourism destinations that have been shut down for a year and need you to go on wine tours and kayak trips. Spending your money, and diverting some savings back towards businesses that need it isn’t bad, just plan ahead for it accordingly to avoid buyers remorse and credit card statement sticker shock for a while.
How to avoid revenge spending tip #3 is to ask yourself, ‘is this an emotional purchase, or is this something that will truly make me happy?’.
Spending money and consuming just for the sake of living it up and shaking off the Covid-cobwebs is NOT going to be worth it. I know you haven’t been able to have nice things for a what feels like a really long time, but that combined with your currently very big savings account isn’t a good enough reason to drop buckets of money into parties, or outfits, or so many vacations and trips that you actually make yourself more tired than when you’re working. If you’re already pretty happy with your spending habits, don’t allow yourself to stray toooo far from them in the name of yoloing your life away just because the government says technically you can now.
How to avoid YOLO spending tip #4 is to create a ‘to buy’ list on your phone.
This is one of my favourite basic budgeting tips, and it applies to this scenario SO well. Just like a to do list, your ‘to buy’ list is an ongoing list of things you might like to buy in the future. Next time you want to buy something, open up your list, and write down the item. Tell yourself you are NOT allowed to buy this item until two weeks have gone by. If you still feel like you NEED that item in two weeks, you can buy it, if not you can either delete it from the list, or leave it there for later if you want.
Giving yourself time to think about a purchase is a great way to stop wasting your money, because chances are your ‘need’ for that product will have gone drastically down over that two week period. You’ll save yourself SO many purchases that fall into the *love it, couldn’t wear it* category, because realistically you didn’t wear tight spangled designer dresses BEFORE Covid, why would you wear them now?
Finally, how to avoid revenge spending tip #5 is to create a big savings goal for yourself to work towards.
If you have all the extra money sitting around in your accounts after Covid, pick a new financial goal to put it towards instead of blowing it all. Whether that’s saving for a house that’s now within your reach, starting a solid investment portfolio, launching a business you’ve been wanting to do forever, creating a big and meaningful goal for yourself will help shift your thinking, so you’re not tempted to hire a super-yacht for the weekend when you compare it to the value you’ll get from putting down a larger down-payment on your first home. It’s always important to have a large savings goal, and really if you have lots of extra cash kicking around these days you’re going to thank yourself later for setting yourself up for success in the future rather than YOLO-ing it all down the drain.
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