How to Avoid Financially Destructive Revenge Spending
How to Avoid Financially Destructive Revenge Spending
March 4 2023 Financial Imaginer
It’s no secret that revenge spending has become a [post-pandemic] phenomenon, as people try to make up for what they believe they might have missed out on during the pandemic. People are playing catch-up, trying to even the score on their deferred consumption. However, while revenge spending can be cathartic and temporarily rewarding, it can also have serious financial consequences if not managed properly.
Revenge spending can take many forms:
Such as catching up for yourself, getting even with your partner or family, or simply YOLO’ing your way through life.
Unfortunately, revenge spending doesn’t just lead to heightened inflation across the globe but it can also lead to serious financial consequences if not managed properly. It could even destroy potential generational wealth in families.
In this article, we’ll explore the implications of revenge spending and provide some tips on how to overcome it.
Are you ready to talk about revenge spending?
What Is Revenge Spending?
Revenge spending is a phenomenon characterized by impulsive and often excessive spending in an attempt to make up for what people believe they may have missed out on.
It is essentially an act of attempting to fill emotional voids with material items or experiences.
Revenge spending can take form in expensive vacations, luxury purchases, extravagant dates, etc., and it has become increasingly popular over the past year [mainly due to the uncertainty caused by the pandemic].
“This attitude can fuel a habit: “revenge spending,” which, as the name says, is shopping to get back at someone or something that wrongs us — like a job layoff, slumping economy, relationship strife, even a global trauma like the pandemic.”
Dr. Juli Fraga
Revenge spending has both short and long-term implications for not just individuals but for entire economies as well.
Inflation anyone?
Revenge spending can contribute to inflationary pressures in an economy [if it goes unchecked] especially when such expenditures are not backed by income stability or wealth.
In addition, revenge spending also has long-term implications for affected individuals.
It can turn into monetary downward spirals!
Post Pandemic Revenge Spending
In the past two years, revenge spending has become some sort of “post-pandemic phenomenon” that has been popping up around the world.
People are indulging in revenge spending on all kinds of things in an attempt to catch up on what they believe to have missed out on during the pandemic.
It’s almost like the big Marshmallow Test unwind!
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