From revenge saving to budgeting out loud

If you ever click on a social media post on personal finance, your feed will likely get flooded with similar posts from financial influencers touting everything from investing tips to economic commentary. One trend recently taking off in the wake of rising consumer prices due to tariffs and inflation is the idea of "revenge saving."

This concept of aggressively saving and drastically reducing discretionary purchases is likely a response to a similar trend of "revenge spending" that took place shortly after the pandemic. That's when consumers were finally released from lockdowns and began splurging on dinners out, travel, shopping and other purchases they had felt deprived of while waiting for COVID to subside.

While revenge saving might help make up for some overspending during this period, it’s also in response to the uncertainty in the economy in the past year. The impact of tariffs, a weakening job market that may result in layoffs, stock market volatility and escalating global conflicts all contribute to a sense of urgency for consumers feeling like they may need funds on hand to cover an impending crisis.

“When people walk out of their house, go to the grocery store and see that everything is a higher price than they expected, they're going to start looking at their budget," said Nate Crayton, senior financial center leader at Bank of Albuquerque. "They're going to consider what expenses they can cut, how to be more cost-efficient and put more money away. There's just a heightened sense of urgency to have extra money on hand."

According to Crayton, putting money in savings vehicles is always a good idea and he wants to dispel the misconception that you need a large amount of cash to start saving. "If you put small amounts into savings, leave it there and consistently add to it, then it will accumulate and get bigger. It's a matter of being proactive, taking the initiative and telling yourself you don't want to touch it because you want it to grow."

More saving trends
Other personal finance trends that have taken hold on social media in a similar way are “no-buy challenges,” where people challenge themselves not to spend money on former discretionary purchases or on anything at all for a day, week or months at a time, opting out of the consumer economy in favor of saving their money.

Crayton cautions that this approach could potentially have long-term impacts outside of one's personal financial situation. "If everyone says, 'I'm not going to buy things because of inflation,' that could be detrimental to the economy. That could lead to businesses generating less revenue, so they may be unable to invest and grow, and they may start laying people off. It starts this domino effect, which could lead to a recession."

Alternatively, he recommends finding a balance of saving and spending within your means.

Budgeting is in fashion
Those who are looking to budget are also putting their foot down about sticking to it, known on social media as “loud budgeting.”

Getting “loud” means verbally letting friends and family know you have a spending limit you won’t budge on, proudly proclaiming boundaries and financial goals, especially during times when spending creep tends to happen, such as dinners out with friends or vacations.

When people start to pay more attention to their budget, they usually have questions about what they could do better. As a banker, Crayton said the most common questions people have around saving is how to make their money work for them, such as looking at what the current interest rates are on certificados de depósito (CDs) and money market accounts.

"We provide the resources and tools to help them navigate what they're trying to do," said Crayton. "We're here to help them out with solutions. Most people just want peace of mind at the end of the day."

Why save
People save for different reasons. For most, it's to have funds beyond covering day-to-day expenses. Some save for vacations, homes or other big-ticket items or experiences, but one of the biggest reasons people save is to have a safety net in the event of an emergency such as a sudden job loss or a medical crisis. If revenge saving is prompting you to start putting money in the bank, it's helpful to have a goal in mind.

Most financial advisors recommend three to six months of living expenses to cover a job loss. Sin embargo as jobs are taking longer to secure, you may want to increase that goal to 12 months. In addition, some financial experts are starting to recommend more savings to cover a catastrophic event such as damage to your home and livelihood from a natural disaster.

Using tools to save
Crayton said people can take advantage of different methods and tools out there to help themselves save.

Round up: Many banks have an automated round-up tool you can set on your debit card to round up each purchase to the nearest dollar and deposit that amount into your savings to help add up.

Automation: You can set up an automatic transfer every time your paycheck goes into your checking account. In that way, a specified amount is transferred into savings before you get a chance to spend it.

Budgeting apps: Having a financial tracker right in your hand with apps such as YNAB (You Need a Budget), Monarch or your bank’s mobile app can help you visibly see where your money is going, identify spending habits and find where you can cut back.

Above all, Crayton recommends avoiding extreme reactions to whatever is happening in the economy. Consider saving as a healthy ongoing financial habit to build emergency funds and work toward goals to acquire things you want or need. "We always want to brace for the worst but expect the best," he said.

Are social media financial trends worth the hype?
So, what does Crayton think of all the saving trends circulating on social media? Should people follow the advice of an influencer?

"As a millennial, I'm on social media too and I see what's out there," he explained. "I look at it as strategy-and there are many types of financial strategies. Social media can provide some ideas, but I also recommend speaking to a financial expert like your local banker to get more information so you can make the best decisions about what's right for you."