Post-COVID ‘revenge spending’ appears to be on the way out

After COVID restrictions lifted a great number of of us made up for lost time by shopping leading to a trend known as revenge spending Now with uncertainty surrounding the financial market it appears various are turning in the opposite direction and putting a focus on saving According to a description by the Bureau of Economic Analysis published last week the personal savings rate increased to in April from in January which shows how much Americans are saving their money after the pandemic and in the face of ever-changing tariff policies Barry Glassman president of Glassman Wealth Services noted he wouldn t call what is being seen revenge saving but instead believes we are seeing more prudent saving Much like when we live a bit in excess on vacation and eat a bit too much maybe when we get back we hit the gym more and pay a bit more attention to our wellness Glassman commented I think that s what s going on with a bit more fiscal constraint and savings Glassman reported a variety of things are fueling this among them are dramatic stock industry swings higher interest rates in the D C region and cuts made to the federal workforce Things are more expensive so those vacations that you may have taken a limited years ago after the pandemic or the car that you demanded or even eating out at restaurants things are a bit more expensive he disclosed Another driver here according to Glassman is an increase in how much money you can make by not spending your money With saving interest rates paying or more I think there s a greater incentive for people to park money because they re earning particular money on those dollars set aside Glassman revealed While Glassman declared he isn t a big TikTok user he has noticed a rise in young people who use it encouraging their followers to save spend less or be more frugal with money It s something among young people that s going on right now that has definitely shifted a corner to more constraint in spending to the point where it s now fashionable to not spend Glassman stated He stated his first tip is to store money in interest-bearing accounts such as a savings account In the bulk cases checking accounts don t earn that much He reported aim for accounts with interest rates of Glassman also recommends having urgency savings that you could live off for three to six months but he announced you shouldn t feel like you need to save that much money overnight I would just make sure to start with something even if it s of your paycheck and you re able to increase that let s say in six months to or he commented Whether to save heavily also should depend on a person s debt Glassman declared because saving while also making minimum payments on a credit card balance with an interest rate of is not a great strategy It s really fundamental that people look to balance the amount that they re looking to save as well as pay down existing debts Glassman stated Glassman stated establishing a budget is also helpful when trying to save money and multiple financial planning apps make it much easier to see your spending picture and make necessary cuts When people see where their money is going usually they ll learn a lot from it and behavior will change he mentioned Source