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Now more than ever, it's time to curb your online shopping habit. The Trump administration's tariffs will hit American families hard, with estimates ranging from nearly $4,000 to almost $8,000 per household. With a general attitude of "recession indicators" all around us, one thing is clear: Times are tight.
And as time goes on, your restrictive behavior can swing too far in the other direction, leading to something called “revenge spending.” If you’ve found yourself responding to tight times with overcompensatory spending, here’s what you can do to get your budget back on track.
As the name suggests, revenge spending occurs when you throw your money around as a way to “get back” after experiencing a period of financial hardship—whether a job layoff or, say, a trade war. This sort of spending behavior can be thought of as a backlash to the scarcity mindset. You’re suddenly spending more money to make up for lost time. It doesn’t sound rational, because it isn’t.
I've argued before that sticking to a budget is like sticking to a diet. And if you've ever tried restricting your calories, you know that a binge is inevitable. Revenge spending is like that binge. And like with yo-yo dieting, you could soon you find yourself trapped in a cycle of behavioral extremes.
For any trouble with spending and saving, making a budget is necessary—something like the 50/15/5 rule is a great place to start. Of course, following it easier said than done, especially when there’s an emotional issue at the root of your spending.
Rather than focusing on restriction, the values-based budget aligns spending with your personal values and priorities. To start, make a list of the things that matter most to you financially. This may include saving for retirement, taking dream vacations, buying a home, or building an emergency fund. Define specific goals within each value category and determine how much money you'll need to fulfill them. Then, as you're mapping out your budget, allocate more resources to high-value categories. On the flip side, reduce spending in areas that don't align with your core values.
If you need a mental nudge to stick to your budget, the physicality of being faced with an empty envelope is much more powerful than checking your online bank account.
Here’s where cash stuffing comes in. Label different physical envelopes and fill them with cash earmarked for different expenses. Stuff each envelope with a budgeted amount of cash for that month (or pay period). The key is, you can only spend money in a certain category from the cash in its designated envelope—once the envelope is empty, that’s that for the month.
Cash stuffing works because it forces you to be more intentional (deciding how much money gets allocated into your envelopes) and more disciplined (you can’t put more money into the envelope once it runs out).
Another place to start with your specific spending goals is to physically write down the things you want to buy before you buy them. Use those bank statements to inform what items make your official “to-buy list.” When you read over items on this list, you’ll be able to make a more thoughtful decision as to what you really need.
Like I mention above, revenge spending doesn't feel "rational." You may not be proud of your revenge spending habit, but you can tackle it in a rational way.
Take time to reflect on your recent revenge-buys. What emotional state were you in? Were you stressed about something else in your life? Write down any patterns you can see, so you can regain control over those moments where your desire to spend is strongest.
Remember, too much restriction is what led to your revenge spending problem in the first place. Forming a healthy relationship money means indulging thoughtfully. Ask yourself, “How do I expect this purchase will make me feel? What do I want it to make me feel? What feelings am I trying to avoid by buying it?”
Only you can determine what is truly valuable in your life, whether that’s the occasional latte from your local coffee shop or saving up for a luxurious vacation every year. Allow yourself to indulge, especially if these indulgences improve your overall relationship with money.
For more, check out how you can curb your unconscious spending here.
Full story here:
And as time goes on, your restrictive behavior can swing too far in the other direction, leading to something called “revenge spending.” If you’ve found yourself responding to tight times with overcompensatory spending, here’s what you can do to get your budget back on track.
What is "revenge spending"?
As the name suggests, revenge spending occurs when you throw your money around as a way to “get back” after experiencing a period of financial hardship—whether a job layoff or, say, a trade war. This sort of spending behavior can be thought of as a backlash to the scarcity mindset. You’re suddenly spending more money to make up for lost time. It doesn’t sound rational, because it isn’t.
I've argued before that sticking to a budget is like sticking to a diet. And if you've ever tried restricting your calories, you know that a binge is inevitable. Revenge spending is like that binge. And like with yo-yo dieting, you could soon you find yourself trapped in a cycle of behavioral extremes.
Create a values-based budget
For any trouble with spending and saving, making a budget is necessary—something like the 50/15/5 rule is a great place to start. Of course, following it easier said than done, especially when there’s an emotional issue at the root of your spending.
Rather than focusing on restriction, the values-based budget aligns spending with your personal values and priorities. To start, make a list of the things that matter most to you financially. This may include saving for retirement, taking dream vacations, buying a home, or building an emergency fund. Define specific goals within each value category and determine how much money you'll need to fulfill them. Then, as you're mapping out your budget, allocate more resources to high-value categories. On the flip side, reduce spending in areas that don't align with your core values.
Try cash stuffing
If you need a mental nudge to stick to your budget, the physicality of being faced with an empty envelope is much more powerful than checking your online bank account.
Here’s where cash stuffing comes in. Label different physical envelopes and fill them with cash earmarked for different expenses. Stuff each envelope with a budgeted amount of cash for that month (or pay period). The key is, you can only spend money in a certain category from the cash in its designated envelope—once the envelope is empty, that’s that for the month.
Cash stuffing works because it forces you to be more intentional (deciding how much money gets allocated into your envelopes) and more disciplined (you can’t put more money into the envelope once it runs out).
Stick to a “to-buy” list
Another place to start with your specific spending goals is to physically write down the things you want to buy before you buy them. Use those bank statements to inform what items make your official “to-buy list.” When you read over items on this list, you’ll be able to make a more thoughtful decision as to what you really need.
Recognize your spending triggers
Like I mention above, revenge spending doesn't feel "rational." You may not be proud of your revenge spending habit, but you can tackle it in a rational way.
Take time to reflect on your recent revenge-buys. What emotional state were you in? Were you stressed about something else in your life? Write down any patterns you can see, so you can regain control over those moments where your desire to spend is strongest.
Remember: moderation is key
Remember, too much restriction is what led to your revenge spending problem in the first place. Forming a healthy relationship money means indulging thoughtfully. Ask yourself, “How do I expect this purchase will make me feel? What do I want it to make me feel? What feelings am I trying to avoid by buying it?”
Only you can determine what is truly valuable in your life, whether that’s the occasional latte from your local coffee shop or saving up for a luxurious vacation every year. Allow yourself to indulge, especially if these indulgences improve your overall relationship with money.
For more, check out how you can curb your unconscious spending here.
Full story here:
![[DK]](/data/avatars/s/57/57999.jpg?1720990206){kind=avatar}
