Don’t let a rocky economy dictate your financial security.
I hate how much of my financial stability feels like it depends on factors outside my control. From tariffs raising prices on everything from groceries to tech, to new layoffs popping up every week, the economy is shaky at best.
So I’ve turned to the latest TikTok money trend: revenge saving.
I may not be able to control how far my dollar stretches, but I do get a say in where it goes. If you’re feeling overwhelmed by the state of the economy, you might want to give revenge savings a try, too.
What is revenge saving?
You may be familiar with revenge spending, or splurging after a period of hardship or deprivation. Many of us did it after the pandemic. I emerged from lockdown eager to make up for lost time. I booked a slew of dinners with friends and a haircut at an upscale salon to correct months of DIY home trims. Revenge spending was a way to regain control and relieve the pressure after going through tough times.
Revenge saving can do the same thing, but it’s much healthier for your finances. It shifts the focus from enjoying the here and now to building a buffer for the future. By tapping into the fear and uncertainty many of us are feeling about the economy, it can give you the extra motivational boost you need to stick to your financial goals.
I, for one, find something deliciously satisfying about reframing savings not as a chore or a sacrifice, but as a “screw you!” to economic uncertainty and the high cost of living.
Read more: A Recession Could Crush Your Finances. Keep Your Money Safe in These Accounts
In this economy? Saving money is a power move
Building a cash cushion is a must at any time, but it’s especially crucial now. In addition to the usual things that could derail your finances, like a sudden medical bill or pricey home repair, the threat of a job loss and runaway inflation have many of us on shaky ground. An emergency fund can help you weather these challenges without forcing you to rely on high-interest debt like credit cards or loans.
And every little bit you can set aside helps. Even if your budget is tight, there are manageable steps you can take to boost your savings rate.
How to revenge save like a pro
Ready to take your vengeance on economic stress? Here’s how to do it.
🤑 Put your cash in an account that helps it grow
One of the secrets of savvy saving is harnessing the power of compound interest. With compounding, you earn interest on the money you’ve deposited plus any interest you’ve earned so far. It can supercharge your savings, but only if you put your cash in the right account.
The national average savings rate is a measly 0.38%, but today’s top deposit accounts can offer rates 10 times that amount (or more).
If you’re building an emergency fund, look for a high-yield savings account with an APY above 3%. Your interest rate is variable and could change when the Federal Reserve starts cutting interest rates, but you’ll still earn more over time than you would with a traditional savings account, and you can access your funds anytime if you need them.
If you already have money earmarked for an expense with a specific timeline, like a new car or a home improvement, a certificate of deposit is a better fit. CD rates are fixed, so your interest rate won’t go down, but you must keep your money in the account for the full term or face early withdrawal penalties. You also can’t add money after you’ve opened the account, so you’ll need to have all the cash on hand now.
↪️ Automate your savings
I’ve struggled with remembering to set aside money each month. Sometimes I’ve just forgotten to do it, and sometimes I’ve overspent and had little left at the end of the month. Putting my savings on autopilot has been a huge help.
I set up an automated transfer every payday from my checking account to my savings account, so a set amount is put away before I can touch it.
🏆 Try a savings challenge
Savings challenges are a fun way to gamify savings. Whether you try a no-buy month or another savings challenge, it can inspire you to find new ways to save and reframe your relationship with money.
Reclaim your power
The economy may be out of your hands, but you can channel your fear and frustration into action. By saving as much as you can now, you can make it easier to ride out whatever the economy has in store for you next. And that feels pretty awesome.
