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Avoid revenge spending: Americans looking to spend saved-up cash

spending
Posted at 5:10 PM, Apr 22, 2021
and last updated 2021-04-22 17:10:03-04

With few places to go, Americans have been holding onto their money, tucking it away into savings accounts.

Now, experts warn a new money trend is on the horizon. Forbes calls it "revenge spending."

All that saved-up cash has a lot of people thinking of how they want to spend their money.

A big one right now is home renovations.

"They're not able to spend their money on vacations. They're not able to do what they normally spend their money on, and they're stuck in their home,” said Johanna Alstrin, a designer with Aspen Kitchens.

People are also buying up new and used cars.

"People will come to the store and say, ‘Hey, I lost my car. I just need any car, because now, I got a job,” said a spokeswoman with American Car Center.

There's nothing wrong with spending money if you have it. Companies big and small need your business.

But you should be careful not to overdo it on your revenge spending spree.

Here are a few pointers to prevent overspending:

1. Build your budget based on your 2019 spending habits, not 2020.

2. Set a budget for revenge spending and keep the rest in savings.

3. Check for points on your credit card. Use your points for traveling and entertainment before dipping into savings.