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Madison Hayes considers herself to be in her \u201cfull-blown revenge saving era.\u201d<\/p>\n
During the pandemic and the real estate boom that followed, Hayes (who is a realtor) was very focused on business growth and basically ignored her personal finances. Late last year, she realized how much money she\u2019d spent on things like food delivery<\/a>, subscription boxes and social memberships she never had time to use.<\/p>\n \u201cNow I\u2019m saving 48% of my income year-to-date,\u201d says Hayes, who owns Gateway Realty Group in St. Louis, Missouri. \u201cI treat saving like a competition with my past self.\u201d<\/p>\n Because she owns a business, Hayes says she keeps four months of operating expenses in her bank account. She also has her bank automatically transfer any money in excess of her reserve to a high-yield savings account at the end of each month.<\/p>\n \u201cIt\u2019s simple, but it\u2019s changed everything,\u201d she says.<\/p>\n Hayes isn\u2019t an outlier. She\u2019s part of a subset of Americans shifting their focus from spending to super-saving \u2014 a trend known as \u201crevenge saving.\u201d<\/p>\n What is revenge saving?<\/p>\n \u201cRevenge saving\u201d translates to saving very aggressively, often after a period of overspending<\/a> or financial uncertainty.<\/p>\n \u201cThey\u2019re going to try to outdo themselves, and save probably in a way they never have,\u201d says Martin Lynch, president of the Financial Counseling Association of America. Lynch says the only time he\u2019s seen saving this intense is with couples focused on saving money for a house down payment<\/a>.<\/p>\n \u201cThose are your real spartan savers who cut out everything,\u201d Lynch says. \u201cI\u2019ve even cautioned the home buyers not to be that aggressive because it just means there\u2019s a greater chance they\u2019re going to fail.\u201d<\/p>\n For many revenge savers, it\u2019s about feeling like you\u2019re in charge of your situation, says Lev Mandel, a financial life strategist in Walnut Creek, California. \u201cWhen inflation is high, when the economy\u2019s not great or there are questions around it,\u201d Mandel says, \u201crevenge saving brings back that feeling of control.\u201d<\/p>\n Why is revenge saving having a moment?<\/p>\n Post-pandemic, people engaged in revenge spending \u2014 splurging on experiences and travel after years of feeling restricted. Revenge saving may be a reversal of the trend.<\/p>\n \u201cIt\u2019s the pendulum swinging back to, \u2018Hey, I\u2019ve done all the vacations and things like that, and now I really need to get my house in order,\u2019\u201d says Marcel Miu, a certified financial planner in Austin, Texas.<\/p>\n People also may be reacting to news of layoffs and economic uncertainty in general \u2014 and that fear leads them to stockpile as much cash as they can, Lynch says.<\/p>\n \u201cAmericans typically start saving in advance of and during periods of recession<\/a> and increasing unemployment,\u201d Lynch says. \u201cJust the fact that people see that others are going to be out of work makes them think, \u2018Oh, that could be me.\u2019\u201d<\/p>\n But isn\u2019t saving a good thing?<\/p>\n Saving money<\/a> is definitely near the top of the \u201csmart choices\u201d list. But it\u2019s a balancing act \u2014 saving money at the expense of other goals or to the detriment of living your life normally isn\u2019t sustainable.<\/p>\n For instance, putting all your money into your 401(k) can leave you with little cash on hand for emergencies, Lynch says, while putting every dollar into your emergency fund<\/a> and skipping 401(k) contributions can leave you worse off in retirement. And trimming your budget to the bone can lead to savings burnout.<\/p>\n \u201cThere has to be a balanced, thoughtful strategy,\u201d Lynch says. \u201cWe don\u2019t want to lurch from one side of the boat to the other when the seas get rough.\u201d<\/p>\n How to revenge save without regret<\/p>\n If you\u2019re feeling the urge to funnel buckets of money into savings, try these strategies to keep your financial plan balanced:<\/p>\n