Did you pick up a few bad spending habits during the pandemic? You're not alone.
Some of us have turned to compulsive online shopping, buying way more than we need as a coping mechanism for emotional stress, which can lead to financial stress and debt and create more emotional stress. It's a vicious cycle.
On the other side of super-spenders are super-savers who are also experiencing post-pandemic money anxiety. People like those coupon clipper fanatics who will forgo buying essentials such as toilet paper until they can stack enough savings to get a rock-bottom price.
But who can blame us? With more than 52 percent of employees concerned about their financial health, it’s no surprise that many of us are turning to overspending or hoarding money as a way to feel more in control of our finances.
"The COVID-19 pandemic caused many consumers to reevaluate their finances," says financial expert Catherine Alford, the author of Mom's Got Money and co-founder of MillennialHomeowner.com. "Many people were able to save more money than ever, due to not eating out and a pause on federal student loan payments. Others lost their jobs and experienced extreme financial hardship. Ultimately, a global emergency should encourage all of us to be better prepared and to have an emergency fund on hand. However, it's still best to avoid the extremes of oversaving or overshopping."
If you're not sure whether you fall into either category—or maybe you're a bit of both—here are a few telltale clues, plus a few strategies to get back on track.
You may be an overspender if...
You don't have a debt repayment strategy. If your credit card balances are growing and you haven't considered how you'll pay them off, or if you're making minimum payments only and continue to rack up debt, you may be an overspender.
You're dipping into your emergency fund for non-emergency purchases. Most experts advise saving enough to cover six months of expenses for emergency situations, like unexpected medical bills or home repairs. But if you're spending that money on discretionary purchases, like frequent shopping sprees, it might be time to reassess.
You may be an oversaver if...
You feel really attached to your money, so much that you don't want to let it go. Some people have separation anxiety when it comes to money. While it’s smart to scrutinize every purchase, it might be a problem if you feel overly attached to your cash. "If you live in fear of never having enough and you don't spend money on the things you can enjoy, oversaving can contribute to unhappiness," Alford says.
You feel guilty treating yourself. If you deny yourself small delights—like dinner at a restaurant or new shoes—it could be a sign you’re allowing fear of lack of money to cloud out life’s simple joys.
You’re terrified of financial catastrophe. “[If] you live in fear of needing all the money you saved due to some unforeseen event, you could be an oversaver,” Alford adds.