We are at the beginning of Summer and the lifting of Covid-19 restrictions. Vaccination lotteries are in full effect and most people can’t wait to get out and have some fun! Well, retailers are now bracing for what is being referred to as a phenomena called “revenge spending.” You know, having been in lock down for almost a year, people can’t wait to start shopping, eating, vacationing and spending like crazy! Now for some people, they’ve been spending and shopping online throughout this pandemic. So, I guess there’s no revenge spending for them, just excess spending. Here are some things you should consideration before you start revenge spending.
Perfect Good Habits
One theory says that it takes 21 days to form a habit. In dealing with this pandemic for over a year, I am pretty sure you have developed some very good habits while in isolation. For example, if you baked and cooked more during the lock down, don’t run away now from your kitchen. Think of all the money you saved by not eating out as frequently as you did pre-pandemic. Yes, some of you are tired of your own cooking and want to get out. You should get out. But not like you did before. Don’t ruin your budget. Perfect the good financial habits you developed during the Covid-19 pandemic. Try to make these new financial habits permanent.
How’s Your Reserve?
Before you start revenge spending, check your reserves or emergency fund. Covid-19 showed many of us that having an emergency fund was critical for survival, but that three months was not enough. Remember how the experts told us that we needed three months of saving for an emergency fund? Well they never told us how much to save for a pandemic. Clearly you need to have enough reserves for six to twelve months. Therefore, before you start revenge spending, make sure your emergency fund is replenished to pre-pandemic or even higher levels.
Tap into your benefits
Prior to the pandemic, and even during this period, many people stacked up different kinds of rewards by using their credit cards. Therefore, if you are going to revenge spend take advantage and use the extra milage earned for your vacation travels or some of those bonus points from your rewards credit card programs to pay for those fun activities this summer. Further, despite the mad spending spree taking place, there are still bargains and deals to be found. So, don’t get caught up in releasing your lockdown spending anxiety and blow your budget.
Covid-19 and lockdowns have indeed taken a toll on all of our health and wellness. We all need to get out, have fun, and enjoy life. But what are you revenge spending on anyway? Will it be on things that will appreciate or depreciate? And how much do you plan to spend? May I suggest that your post pandemic approach to your finances must be different from your pre-pandemic money management. Why? There is a new economy emerging in 2021. Are you ready for the change?
