One unexpected side effect of the pandemic is Americans spent less and saved more than normal. As a result, credit card balances are lower and personal finances have improved.1, 2, 3

You know what they say about money burning a hole in your pocket. Americans are ready to spend some of their savings. 


While having extra money inspires many people to splurge, it’s important to keep a level head. Spending has risen sharply during 2021. According to the Bureau of Economic Analysis, spending increased:4

While the idea of ‘revenge spending’ may be appealing, very few household budgets can withstand sustained increases in spending without significant increases in income. So, as you break free from pandemic restrictions, it may help to keep some basic principles in mind:

1. Decide which savings habits you’d like to keep.

During the pandemic, Americans saved a lot of money. The average household saved about $245 by not going out to eat, $1,400 by not vacationing, and almost $5,700 by not making major purchases, according to the Covid-19 & Finances Survey.5

Consider whether and how much to continue saving.

2. Be aware of how much you are spending.

When people have extra money saved, it’s just fine to splurge on something fun, especially after a long stretch of missing out on traditional everyday activities.

Decide the amount to spend and then track how much has been spent.

3. Eliminate things that are not needed.

During the last year, many people prioritized spending differently. Optional expenses, like dry cleaning, house cleaning, commuting, and happy hours, were eliminated. In some cases, the result was an increase in savings and wealth.

Review your financial priorities to see if they have changed.


Many people experienced financial insecurity during the pandemic lockdown. As a result, emergency savings accounts and other types of saving have become more important.

If your financial priorities have shifted, let us know. Spending less and saving more may help you build wealth and improve financial security. Contact us today to set up a consultation.


1 https://fred.stlouisfed.org/series/PSAVERT

2 https://fred.stlouisfed.org/series/PCE

3 https://www.cnbc.com/2021/06/02/how-to-make-the-most-of-revenge-spending-after-a-year-spent-inside.html

4 https://www.bea.gov/data/income-saving/personal-saving-rate

5 https://s2.q4cdn.com/437609071/files/doc_news/research/2020/covid-19-and-finances-survey.pdf

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