Are you revenge spending? Don’t make matters worse
Are you feeling pent-up anger, anxiety or a huge need to be free to spend? You’re not alone. Revenge spending is on the rise now that pandemic restrictions are easing. In some cases, revenge spending is impacting relationships with partners taking out resentment toward each other through overspending.
Revenge spending is essentially unhealthy spending fuelled by “I’ll show you” motivation, and, if left unchecked, it will make your financial and relationship matters much worse.
If you are revenge spending, take revenge on other areas of your finances that could result in greater financial health for you instead.
Target expenses that got out of hand during the pandemic
Start first with trimming expenses you’ve probably ignored for a while. Consider bundling and renegotiating your home and auto insurance, which could easily save between $300 and $500 annually. Your driving habits have also changed, too, which could result in further savings.
Were you one of those people who signed up for every subscription under the sun during your pandemic boredom? Cutting back unnecessary subscriptions can save an average of $500 per year.
You might want to pare down on takeout orders and on spoiling your kids, too. This could add to thousands in savings.
Take revenge on overspending habits next
When the urge to buy comes up, replace it with something healthy like making a smoothie, playing with your toddler, going for some exercise or enjoying some sunshine. It can also help to just wait 24 to 48 hours before buying. The temptation might subside naturally after you’ve reflected on whether the purchase is a need or a want.
My personal favourite way to deal with runaway spending is a spending detox. Try to go seven to 14 days without spending ANYTHING on non-essentials. It’s like a financial cleanse where you consciously stop spending money. Anytime you avoid a purchase, etransfer that money into your savings account. You’ll be amazed at how powerful it can be for your wallet and money mindset by just turning the taps off your spending for a few days.
Prioritize spending on your health and wellness
The consulting firm Morneau Shepell (now known as LifeWorks) has shared much recently around the subject of taking a more balanced approach to caring for our money like we do our mental and physical health. I couldn’t agree more.
It is OK to spend money on wellness activities. I recommend that three to five per cent of your take-home pay goes toward wellness (mental, physical and financial wellness). That means it’s totally fine to allocate money toward new walking shoes or even some financial coaching. It’s all about moderation.
Crushing your debt will feel like the sweetest revenge
The problem with revenge spending is that it results in more debt. But, by taking revenge on prioritizing paying off the balances of pre-existing debts, you’ll feel empowered and will start saving money. Why not clear up high-interest balances with lower-rate consolidation loans, lines of credit or low- interest credit cards if you can’t qualify for the former. This can save thousands, especially considering interest rates reached an all-time low during the pandemic!
I get that you might be a bit angry at the past 20 months. I know I’ve struggled with it, too. But channel the energy you’re spending on revenge toward creating a healthier happier chapter for the rest of 2021 and next year.
This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.
