With businesses and individuals taking steps to return to normal living, there's a lot of pent up consumer demand to spend. The new term "revenge shopping" implies that consumers will be making up for lost time with a boom in products and experiences they couldn't purchase during the lockdown.
The National Retail Federation estimates that retail sales will increase between 6.5 to 8.2 percent this year over last year to a total of $4.4 trillion, exceeding the 4.4 percent average during the previous five years. Of those who plan to indulge in a few revenge purchases, the 2021 McKinsey consumer sentiment report found that around half of consumers admit to being pandemic-fatigued and intend to splurge on things like high-end fashion, beauty, and electronics.
Though an occasional splurge won't completely devastate your budget, overindulging without a plan could. This doesn't mean you can't go out and spend your money. Just make sure you follow these five steps to do so without any financial regrets.
1. Adjust your budget. Whatever it is you are planning to splurge on, whether that be a getaway, designer clothing, or beauty service, make sure you budget for it first. This may mean cutting back in other areas to make room for this new expense so you don't take on debt.
This is a great time to rebalance your budget and cancel services you took on during lockdown that you no longer need, like extra video streaming services or meal kit deliveries. Cancelling unnecessary subscriptions and memberships can free up some extra cash for your revenge purchases.Try the free Debt Optimizer by MoneyTips for help with reducing your interest payments and lowering your debt.
2. Consider second-hand or swap. Indulge in a little revenge shopping without blowing your money by perusing second-hand sites for gently used fashion or kids toys, or swapping for no cost at all. For instance, search "buy-nothing groups" in your area on Facebook where you can trade unwanted items.
Sites like Poshmark, Tradesy and The Real Real are great places to find designer fashion brands for a fraction of regular retail prices. While you're at it, sell items you no longer need to pay for your revenge purchases.
3. Hustle for extra spending cash. Dipping into your current monthly cash flow could disrupt any progress you're making towards goals of paying off debt and rebuilding savings, which is ill advised.However, this doesn't mean you have to completely deprive yourself of a few splurges. Instead, look for opportunities to make some extra cash on the side to go toward that much-needed getaway or new pair of shoes.
From signing up as a delivery driver through Postmates or joining virtual focus groups via 20|20 Panel to online tutoring through Varsity Tutors and dog sitting through sites like Rover.com, where you can make up to $1,000 a month, there are plenty of opportunities to earn spending cash without interfering with your budget.
4. Stretch revenge dollars. You can get more bang for your revenge buck by searching daily deal sites such as Groupon and Living Social, where you can find savings of up to 70 percent off dining, beauty services, activities, and entertainment. Even warehouse stores like Costco offer discounts on theme park tickets, restaurant gift cards, travel, and more, making it more affordable to go out and give in to your desire to spend!
5. Create spending rules. There's nothing wrong with a few revenge splurges as long as they aren't wasteful (and fit into your budget as mentioned above). Unfortunately, it's easier than ever to buy things on impulse, thanks to online sites and apps that make it so easy to click the Buy button without a second thought. Creating spending rules, such as giving yourself 24 hours to think over an impulse purchase or discussing big-ticket purchases with your partner first, can help provide clarity and avoid unnecessary purchases.
Other things you can do to prevent impulse shopping is to delete payment information from store apps and websites. The time it takes to re-enter these details may be just enough to dissuade the potential purchase.
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