No one expected a global pandemic to roll over the world like a giant tsunami, forcing everyone indoors, with lockdowns and masks becoming the norm—but it did. Practically overnight, businesses shuttered, restaurants were forced to close, and any company that could operate remotely pivoted. All of a sudden baking bread, making pizza, working in sweats, and ordering groceries online were front and center. For those who lost their jobs, as well as those who were already struggling, emergency funds dried up, along with any feel-good excess spending.

After more than a year of fear, rising death rates, and daily infection surges, there’s some good news. COVID-19 infection rates and deaths are down, vaccines are rolling out, and the U.S. economy is opening back up. As restrictions continue to ease, many people are ready to toss caution to the wind and celebrate by splurging on anything and everything. This urge, commonly known as “revenge spending,” isn’t unusual. In fact, revenge spending, or “revenge buying,” as it’s also known, has been around for decades. It dates back at least to the 1980s, when a post–Cultural Revolution China opened up to luxury retailers and demand surged.

It typically follows an unprecedented traumatic event, like the COVID-19 pandemic. Many of those who were able to stash away cash over the past 12 months have emerged with a strong impulse to make up for lost time and embrace a you-only-live-once attitude. Bloomberg Economics estimated that as of January 2021 Americans were sitting on roughly $1.7 trillion of excess savings accumulated during the pandemic. That’s a lot of cash to play with.

However, before breaking open your wallet, you may want to take a moment to assess the situation. If the pandemic taught us one thing, it’s the importance of having an emergency fund. If you don’t have one—or the crisis depleted the one you had—you may want to build up that buffer before anything else. “Seventy-one percent of families say they didn’t have sufficient emergency funds heading into the pandemic, while 24% of families report that they are working fewer hours due to the pandemic,” says Judith Ward, a senior financial planner with T. Rowe Price.

Key Takeaways

  • As vaccines continue to roll out, infections drop, and the U.S. economy reopens, people are feeling an urge to splurge.
  • Known as “revenge spending,” this rush to spend typically follows an unprecedented event as people seek to reclaim control and a sense of normalcy.
  • Some are looking to spend more on experiences and travel, while others are keen to buy new clothes as businesses reopen.
  • Experts caution against overspending, advising instead to take a step back and replenish any emergency funds first.

Post-Pandemic Spending

Nearly half of those surveyed in February 2021 by Charles Schwab said they were eager to get back to pre-pandemic living and spending, with 24% keen to make up for lost time. Among the biggest splurges on the list were travel (24%), dining out at a fancy restaurant (21%), and hosting a party (15%).

Travel tops many a post-pandemic wish list. While there’s a lot of discussion about whether or not vaccine passports are a good idea from a privacy standpoint, a January survey conducted by the travel website the Vacationer showed that 74% of Americans said they would be willing to sign up for some version of one or an app to show airlines and border officials their vaccine status. While there was a strong desire to get back out and about, in January only 28% said they would be comfortable traveling, with 24% saying they’d only be comfortable once they were vaccinated.

Now, as of June 7, 2021, with 42.1% of Americans fully vaccinated and 51.7% with at least one dose, there has been a real surge in travel. The federal government’s Transportation Survey Administration’s checkpoint travel number for June 7, 2021, was just over 1.8 million people, up from about 430,000 one year before, nearly 4.5 times greater.

The pandemic has also resulted in a greater focus on mental and physical health, which may signal a shift in how consumers approach their urge for revenge spending. According to the Schwab survey, 69% of respondents said mental health had become a larger priority, followed by relationships (57%), finances (54%), and physical health (39%). This shift in priorities could result in higher spending on experiences rather than products. “We’re already seeing workers who were robbed of their vacations over the past 15 months starting to upgrade their vacation spending for this year,” said NPD Chief Retail Analyst Don Unser in a March 2021 statement.

Even with the increased spending on travel and dinners out, retail sales are also making a comeback. For the three-month period ending on April 30, 2021, retail and food service sales were up 27% from the same period a year ago, with the biggest gains seen in clothing, sporting goods, and home furnishings. Separately, the National Retail Federation expects retail sales to gain momentum as more people get vaccinated, predicting a jump for 2021 in the vicinity of 6.5% to 8.2%.

What About All Those Stimulus Checks?

There have been three rounds of stimulus check payments made by the federal government to help support struggling individuals and families whose finances were negatively impacted by the pandemic. While it would have been easy for some to look upon these checks as free money, most people used these funds for their intended purpose and spent the bulk of their checks for essential items and paying down debt. Even this last round of payments was largely used for essential items, with only a tiny fraction (8%) going toward nonessential purchases.


The percent of money from the last stimulus payment that people put toward nonessential purchases

How to Manage Your Revenge Spending Urge

When it comes to spending your way out of a pandemic, take it slow.

  • Create a budget. No matter how big or small, know where your money is going and how much extra you will have left over.
  • Make it a point to pay in cash to ensure that you aren’t spending more than you can afford.
  • Before you click that checkout button, consider how many items you really need versus how many you want.
  • Set money aside for future big-ticket wish-list items, such as a house, a big vacation, and retirement.

Also, don’t forget the money lessons learned during the pandemic.

  • Create (or replenish) an emergency savings fund before indulging in a buying spree.
  • Pay down any high-interest credit card debt that may have been run up during the pandemic.
  • If you had to dip into your retirement savings, work on replenishing them.