Post Covid-19 lockdowns and quarantines have witnessed a new phenomenon to watch out for — revenge spending. And yes, it can be as intense as the name suggests. Revenge spending is a pattern of excessive spending to overcompensate for the lack of ability to shop during the quarantine.
This was a phenomenon first seen in China after the country reported zero new cases of domestic infections on 26th March. Consumers came out of quarantine with a new fervour for spending.
While it might seem harmless to spend a little more after being deprived of shopping for so long, this mentality could lead you down a path that your wallet might not be able to handle. So here are some simple tips to keep in mind and make sure that balance on your bank account doesn’t take another hit.
Avoid trivial purchases
Every little thing adds up. The reality is that the global economy is going into a recession, which means that more people will lose their jobs. While we hope it won’t happen to us, we don’t know for sure if we will be next in line on the retrenchment list. As much as companies are trying to keep their workforce, there are bottom lines that companies need to maintain.
So exercise some wisdom and avoid unnecessary (and luxurious) purchases during this period. It’ll help to keep our cash resources for rainy days or savvy investments options. This may be a new habit to cultivate but just before you head to the checkout counter, ask yourself: “Do I really need this right now?” Many trivial purchases can add up to an amount that might be a tough bill to pay eventually.
Get your home ready for remote working
Be prepared to work from home again. As much as we hope for life to go back to normal, this lockdown has taught us that we don’t know what to expect in such uncertain times. We can hope for the best but it’s always good to be prepared to stay at home more often.
It’s best to replicate an office space at home that is well-lit, well ventilated and not on your bed. Sending emails on your bed may feel fine the first few times but eventually it’s going to take a toll on your body, energy levels and even your mood. If you really have the urge to spend, invest in something that will make working from home easier and take care of your well-being to prepare for any such emergencies in the future.
Fatten Up Your Emergency Fund
The reason for an emergency fund has never been more apparent than in such times. While unemployment rates rise and more employees are told to take mandatory pay cuts or no pay leave days, many people’s incomes are greatly affected.
This Covid-19 virus has taught us that we shouldn’t undermine the need for an emergency fund. Check out this post to understand more about how much your emergency fund should have, based on your personal needs. (The Planner Bee emergency fund calculator will help you determine the size of your emergency fund.)
Eat at home more often
All the Master Chefs in the making have stepped up and started to shine on social media during this lockdown. If you’re great at cooking, then this tip would continue naturally for you beyond the lockdown.
If you’re not so good at cooking, now is not the time to give up. Cooking is a skill that can be picked up. Making your own food not only saves your money but also ensures that you know what’s going into your food. Also, if you’re planning to lose some of that lockdown weight that you may have gained, home cooked meals are your best bet.
Buy only what sparks joy!
During the time we were confined to our homes, I hope some of us managed to do some spring cleaning and packing. If you haven’t, we defer to the great Marie Kondo’s packing tips. Get ready to see how much clutter you have in your life.
So before you buy that new pair of pants or the latest gadget, ask yourself if this purchase truly “sparks joy”. Otherwise, it’s a waste of your hard earned money and space.
Invest in your future
If you have spare savings, instead of using it on impulse buys, it’s more worthwhile to invest your idle money into ETFs, mutual funds or unit trusts. Most markets have gone on a downward roller coaster ride and this presents us with many good opportunities to invest. Of course, before you do that, consider getting advice from a trusted financial advisor.
Relook your gym memberships
Since gyms and fitness centres were closed during the lockdown, many people invested in buying dumbbells, exercise mats and have been able to workout more at home. If this has worked for you, perhaps it’s time to reassess your need for multiple gym classes that cost you hundreds each month, or even up to thousands each year.
If you can swap some unlimited passes to fewer sessions in the gyms and more sessions at home, you’ll be surprised at how much you can save. Of course one thing you probably can still spend on from time to time is activewear that you’ve become so accustomed to lounging in all day long. Put those weights you purchased to good use and have some workouts right from the comfort of your own home!