reopening | How to avoid overspending in the post-pandemic period

As health restrictions ease and more people get vaccinated, many Canadians are eager to make up for lost time spending.

Leah Golub
Canadian Press

And the phrase “revenge spending” is common, hinting that some people are eager to squander the consumer goods or experiences they were forced to give up last year.

In the United States, where restrictions have been lifted more quickly than in Canada, most spending is in beauty and nail salons, sporting goods stores, restaurants, clothing stores, and retailers. Car dealers, according to a recent report by TOP Data on post-pandemic recovery.

The phrase “revenge spending” was new to Liz Schick, a certified financial planner at The New School of Finance in Toronto, but it’s a familiar phenomenon to her, especially when speaking to independent professionals, seasonal workers who experience fluctuations in income throughout the year.

When the inferiority period is over, it’s often like, “Woohoo, we’re going to spoil ourselves! I want to do lots of fun things!”. It’s a natural reaction to not being able to do anything.

Liz Schick, Financial Planner

While all demographic groups feel the need to party and spend, young people in particular can be motivated by the feeling that they have been robbed of precious time, El-Sayed continued.^I Check.

“This is the time when they want to go out, they want to go to bars, they want to go to concerts, they want to take a lot of trips and they want to see their friends. A lot of people are very social during this time in their lives, they really missed it and that made sense.”

Ally Bly, a 31-year-old employment counselor from Toronto, can’t wait to dine with friends, sip cocktails at her favorite bars, attend concerts, visit museums and galleries, and visit friends and family in Ottawa once she finally receives her second dose of Pfizer vaccine. .

“When going out is safer, I will definitely consider the possibility of doubling my spending, for example if I maintain my epidemiological habits, and spend more money on groceries and online shopping,” while spending money on going out or taking out trips,” noted M.^I Yes.

“If I did, I could end up using more of my savings to cover these costs, rather than keeping a small reserve or investing a certain amount.”

More opportunities to go out and celebrate

When people get a job promotion or celebrate a birthday or vacation, they may be tempted to spend more, but there is a clear end period for those expenses, notes Avni Shah, associate professor of marketing at the University of Toronto and a research fellow at Rotman. Management School.

“Where it’s a little bit exciting and a little more dangerous than typical cases when it’s not just related to a one-time event,” she said.

Now, people are motivated to spend when they are fully vaccinated, perhaps when a spouse is vaccinated, then when every good friend is vaccinated, etc.

M said.^I Shah, which increases the likelihood of overspending when spending.

M’s advice.^I Shah has to make educated decisions when it comes to spending, especially when it comes to material goods. She recommends making a list and asking yourself, “What makes me want the most?” “While lifting containment measures.

“It’s better to look for these items on purpose rather than impulsive buying, which can lead to problems,” she added.

This tactic can also be applied to social and group experiences, such as parties with friends.

For experiences outside of that, it’s best to look for cheaper options, like a drink at happy hour, for example.

M^I Shah and^I Schieck recommends creating a budget to determine exactly how much money should be allocated to personal services, consumer goods, expensive items (such as travel), or experiences with friends, family, or even acquaintances.

It can be easy to forget because [dépenser de l’argent pour sortir] It wasn’t in our budget for a long time, because of COVID,” M ” noted^I Shah. “It is not like that in our habits anymore.”