Are You Still Revenge Spending?
Consumer spending habits don't seem to be slowing down
Here’s what to expect in this newsletter!
📰 Interesting financial news: Stay up to date on what’s happening in the economy.
📈 What’s popping in the stock market: The 411 on trending/interesting stock market news.
📝 This week’s main topic: What this newsletter’s title is about!
🥰 Team CGF’s Amazon favs: Affordable yet helpful Amazon finds.
📰 Interesting financial news
What went wrong with US inflation? ( Bloomberg via FinancialPost)
Biden has canceled $153 billion in student debt. Younger borrowers haven't felt it. (MorningStar)
The salary a single person needs to live comfortably in every U.S. state. (CNBC)
📈 What’s popping in the stock market
LVMH first quarter shows sales growth slowdown on luxury spending. (Ticker Symbol: LVMUY)
Netflix stock sinks on disappointing revenue forecast. (Ticker Symbol: NFLX)
📝 Main topic: Don’t let your revenge spending turn to doom spending!
We saw revenge spending towards the end of the pandemic. This incremental increase in spending after an unprecedented adverse economic event such as COVID-19 led many Americans to spend more money on things like traveling and eating out.
Post-pandemic, this trend is still going strong—so much so that revenge spending has turned into doom spending. A similar trend that includes spending money despite worries about the economy and foreign affairs to cope with stress.
Let's examine these consumers' spending habits and consider how to prioritize your finances without fearing you'll miss out on something.
The current spending habits among consumers
According to the Bankrate survey, 44 percent of U.S. adults expect to spend more on at least one fun purchase this year, and they are more specifically willing to spend more on traveling, dining out, and live entertainment, such as theater performances, concerts, and sporting events.
Whether it’s doom or revenge spending, 27 percent of Americans are willing to take on debt to travel, 14 percent say they'd take on debt to eat out, and 13 percent will likely rely on credit to help them attend live entertainment events.
So why the obsession with spending money?
There are many reasons, but the most apparent reason is wanting to enjoy life now rather than putting off enjoyment until later. Intuit's Prosperity Index report shows that 3 out of 4 Gen Zers would rather have a better quality of life than more money in the bank.
However, not everyone is focused on spending more. 39 percent of survey takers plan on spending the same amount of money on travel as they did last year, and 31 percent expect to spend less.
For eating out, 44 percent will spend the same amount, and 31 percent will spend less. Similar numbers occur with attending live entertainment, where 45 percent plan on spending the same, and 33 percent will focus on spending less.
Whether you want to enjoy the present or save money, we at Clever Girl Finance believe in creating a solid financial future. Therefore, we've got some tips on how you can curve your spending without sacrificing a good time.
How to curb your spending
It's understandable to want to treat yourself to different experiences and try new things. While the future is unpredictable, having a solid financial foundation can help you deal with whatever comes your way. Follow these key tips to help you spend in a way that's satisfying in the present and helpful for your future.
1. Regulate your emotional spending
As you've noticed, many spending habits that cause people to overspend stem from emotions. Emotional spending involves making purchases when you’re in a heightened state of emotions. It can offer temporary relief if you're angry, stressed, sad, or frustrated.
To help you cut back on your spending, consider the emotions that are tied to your spending. If you find that you are spending money because of stress, consider other methods of dealing with your stress, such as therapy, exercise, or talking to a trusted friend.
You can look for alternatives once you identify the emotional causes of your overspending. For instance, try talking to a close friend instead of shopping to cope with sadness.
2. Prioritize spending money on things you value
While spending money on concerts, trips, and fine dining is great consider cutting back on your spending to focus on one or two areas that mean the most to you.
For instance, if you value cultural experiences, consider cutting back on eating out and concentrating on saving money to travel. Decide on an experience that's worth the investment. Once you prioritize what you want, you can start budgeting for it.
3. Start a sinking fund for fun money.
While money is a great tool for securing your future, it is also meant to help you enjoy life. To get the best of both worlds—security, and fun—consider opening a sinking fund for your fun money.
A sinking fund is a dedicated account to save money for a specific purchase. For instance, if you know your favorite artist performs in six months, start a sinking fund for that concert.
4. Look for free or less expensive ways to have fun
You can still have a great time by doing more cost-efficient things. Instead of traveling overseas, plan a road trip. Spend too much time going to clubs and bars; consider hosting a game or movie night with friends. You can create the fun experiences you seek instead of going out and paying for a good time.
Who says you can only have fun if you spend much money? We don't.
Check out our list of 40 free things to do!
5. Don't neglect your emergency savings
While it's tempting to forget the future and solely focus on the present, you might end up in a financial conundrum if you’re not careful. Consider setting up an automatic deposit in your savings account to build your emergency fund.
Additionally, ensure your savings account isn't attached to any debit cards or checks so you're not tempted to spend the money you've saved.
6. Earn extra money to use for fun experiences.
Instead of going into credit card debt because you want to go to the latest concert, focus on making money. With a side hustle, you can specifically dedicate the money you earn to splurging on things you want. Extra cash helps you divide your regular income between your necessities so you can spend your side hustle money however you want.
If you need more help controlling your spending, check out our course on creating a budget that works!
🥰 Team CGF’s Amazon Favs: Kitchen Refresh
Are you looking to spruce up your kitchen this spring? By mindfully switching out a few products, you can upgrade your cooking process! Check out these affordable kitchen items we love.
Black & White Stoneware Measuring Cups with Gold Electroplating
Who knew measuring cups could look so beautiful and elegant? This Stoneware measuring cup will add style to your cooking and baking!
Sabatier 15-Piece Forged Triple Rivet Knife Block Set
Is any kitchen complete without a good set of long-wearing knives? These Sabatier knives are sharpened to perfection and can be used for various food preps. The grips are comfortably made, so they are easy to handle.
CAROTE 21Pcs Pots and Pans Set, Nonstick Cookware Sets
Nothing makes cooking feel better than a quality set of pots and pans. These non-stick Carote pans are the perfect reason to upgrade if you have old and grimy pans that are at the end of their lifespan. What’s even better about these pots and pans is that they are easy to clean!
Kitchen Utensils Set- 35 PCs Cooking Utensils
Have you ever started cooking and realized you’re missing a particular utensil? If so, this 35-piece set of cooking utensils will solve your cooking needs. From measuring cups to spatulas and a slotted spoon, your kitchen utensils will be complete with this set.