What Is Revenge Saving (and Should You Be Doing It)?

Madison Hayes considers herself to be in her “full-blown revenge saving era.”

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’d spent on things like food delivery, subscription boxes and social memberships she never had time to use.

“Now I’m saving 48% of my income year-to-date,” says Hayes, who owns Gateway Realty Group in St. Louis, Missouri. “I treat saving like a competition with my past self.”

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.

“It’s simple, but it’s changed everything,” she says.

Hayes isn’t an outlier. She’s part of a subset of Americans shifting their focus from spending to super-saving — a trend known as “revenge saving.”

“Revenge saving” translates to saving very aggressively, often after a period of overspending or financial uncertainty.

“They’re going to try to outdo themselves, and save probably in a way they never have,” says Martin Lynch, president of the Financial Counseling Association of America. Lynch says the only time he’s seen saving this intense is with couples focused on saving money for a house down payment.

“Those are your real spartan savers who cut out everything,” Lynch says. “I’ve even cautioned the home buyers not to be that aggressive because it just means there’s a greater chance they’re going to fail.”

For many revenge savers, it’s about feeling like you’re in charge of your situation, says Lev Mandel, a financial life strategist in Walnut Creek, California. “When inflation is high, when the economy’s not great or there are questions around it,” Mandel says, “revenge saving brings back that feeling of control.”

Post-pandemic, people engaged in revenge spending — splurging on experiences and travel after years of feeling restricted. Revenge saving may be a reversal of the trend.

“It’s the pendulum swinging back to, ‘Hey, I’ve done all the vacations and things like that, and now I really need to get my house in order,’” says Marcel Miu, a certified financial planner in Austin, Texas.

People also may be reacting to news of layoffs and economic uncertainty in general — and that fear leads them to stockpile as much cash as they can, Lynch says.

“Americans typically start saving in advance of and during periods of recession and increasing unemployment,” Lynch says. “Just the fact that people see that others are going to be out of work makes them think, ‘Oh, that could be me.’”

Saving money is definitely near the top of the “smart choices” list. But it’s a balancing act — saving money at the expense of other goals or to the detriment of living your life normally isn’t sustainable.

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 and skipping 401(k) contributions can leave you worse off in retirement. And trimming your budget to the bone can lead to savings burnout.

“There has to be a balanced, thoughtful strategy,” Lynch says. “We don’t want to lurch from one side of the boat to the other when the seas get rough.”

If you’re feeling the urge to funnel buckets of money into savings, try these strategies to keep your financial plan balanced:

• Have savings goals: Save for something specific, not just because you’re feeling anxious. 

• Prioritize: Make sure you’re paying off high-interest debt and covering your important financial goals, like retirement and college funds. 

• Automate: To the extent you can set up automatic transfers into savings or investment accounts, do it. 

• Set an end point: Pick a date to reevaluate and rebalance as needed.