The rise of ‘revenge saving.’ Here’s how Canadians are hitting the reset button on their money

It sounds angry. But, it’s not.

In a world defined by economic, personal and global uncertainty, many Canadians are turning to a new financial behaviour: revenge saving.

It’s the intentional decision to save more aggressively after a period of feeling financially stretched or out of control.

For many, it’s both a financial and emotional reset.

We’ve seen this before. During the pandemic, Canadians boosted savings in response to uncertainty. The lesson this time? Do it better.

Moderation matters

When times are uncertain, saving more money is always a good strategy, but cutting everything out isn’t. Extreme frugality can create a lasting sense of financial doom and chronic money anxiety. Many Canadians learned this during the pandemic.

Moderation with saving and spending remains the most sustainable path forward, and encourages the habit of consistency, which is the most important habit to create financial security.

It begins with slowing down. Whileothers are rushing to upgrade their lifestyle by downsizing or renovating their house, leasing a new car, or booking expensive trips, taking a financial pause can pay off.

Take a beat. You can better assess needs versus wants when you have a bit of space.

Revenge saving, at its core, is about regaining control while the world spins madlyaround us.

Small habits work and create a big impact

Financial therapists and money coaches often recommend daily saving to help navigate financial anxiety.

A simple$5 a day — equivalent to a daily coffee or gym membership — transferred into a high-interest savings account, may not seem like a lot, but it quickly adds up.

Clients I’ve worked with who practice daily savings often increase their contributions after seeing the balance grow. This daily habit can be applied to debt, too.

Start by reviewing your recent spending patterns. What added value to your life? What didn’t?

A clear budget will also help you understand what you can afford to spend, and what you could be saving. Examine the essentials too, like housing, groceries and transportation. Though more fixed in nature, they can often evolve over time.

Cutting back on low-value spending — things like frequent takeout, unused subscriptions — can free up substantial cash flow.

Other habits to work on include the art of negotiation and honing your price-comparison radar.

During the pandemic, many Canadians became price-conscious — shopping sales and flyers, comparing options and haggling for better deals. Keeping that mindset today, especially as inflation appears to be about to wreak havoc again, can stretch your dollars further.

Rethink big-ticket decisions and potentially do the exact opposite

Before committing to major expenses, take a step back. Does the purchase still make sense in today’s environment? Has your financial situation changed? Is the timing right? Can it wait?

If the answer is uncertain, waiting can be a smart move.

Prices for large purchases — furniture, appliances, vehicles, flights — have fluctuated significantly in recent years. Delaying a purchase or exploring second-hand options can lead to substantial savings.

And if you do move forward, look for opportunities. Businesses often offer incentives during slower periods, which can reduce costs.

Flip this strategy on its head and ask yourself if you could potentially sell anything of value, like the recumbent bike you bought during the pandemic and are not using, adding these proceeds to your savings. Perhaps you could even take on extra shifts, relaunch your online course, or earmark the entirety of your tax refund towards savings.

Save steadily, but don’t stop living your life

Stats show the better you feel emotionally, the more likely you’ll make stronger financial decisions. During uncertainty, it’s important to save, but not at the expense of your mental health.

Find ‘wise frugal’ ways to enjoy your life. Spend moderately on what matters to you. Avoid unnecessary credit or excess. Paying with cash or debit can help keep spending grounded and prevent costly interest charges.

Let the world spin and do what it’s going to do. Control what you can, and don’t abandon your savings habits.

Even if you scale them back temporarily, consistency matters. Brick by brick, this pile of cash will become the foundation of your emergency fund.

Keep adding to it over time until you reach three- to six-months of essential expenses.

This can take a few years, but stick with it — your financial anxiety level will thank you.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.