Beware of revenge spending
Yesterday was the 6th monthsary of our quarantine! Little by little, the quarantine is being lifted and shops and other establishments are opening gradually.
I do know that we have to help our economy get back on track, hopefully for it to still reclaim that much touted demographic sweet spot that we entered in 2015. Demographic sweet spot is when the size of a country’s working age is relatively larger than its dependents, resulting in high GDP growth rates.
During the pandemic our activities were restrained to avoid transmission of the disease. No more traveling, eating out, shopping, partying, going to the salon, spas and other recreational activities. Only necessary activities are allowed by virtue of quarantine pass.
What happens when one is suppressed for a long time? There is a bottling up of emotions. Anything that you bottle up is bound to explode somehow. And this can happen to consumers who have been locked down for half a year!
What is revenge spending?
The phenomenon called revenge spending trended online recently, citing stories of how Chinese consumers behaved when stores re-opened, particularly, the Double Five shopping festival that started on May 5. It offered hefty discounts and extended store hours in an attempt to boost spending and make up for the losses caused by the lockdown. Sales, especially those of luxury items such as Hermes, Gucci, Prada, etc., shot up to the roof. The Chinese shoppers, after emerging from isolation, shopped with a vengeance to compensate for lost shopping time!
Online double number sale
Here at home, we have seen how online shops have been using double numbers to create sale events. There’s 6.6, 7.7, 8.8, 9.9 and I’m sure this is going to continue to 10.10, 11.11, 12.12, and so on.
I know someone who joined the 9.9 online sale for the first time. He got exhausted waiting for the time (was that 12 midnight?) and quite stressed about the payment platform. After computing, he realized that he only saved 11% on a net basis and not really the promoted discount or what he thought would be over 50%.
On the other hand, there are some who really enjoy the activity. If you’re one of them, just make sure that you also protect yourself when you get into it. Ask yourself the following questions:
1. Can I afford this?
2. Do I need this or do I just want it?
3. If this is luxury, can I already afford 10 pieces of this? (FQ Mom guideline in purchasing luxury)
4. Would I have bought this if it were not on sale? (If you’re just buying it because of the huge discount, that means you don’t really want/need it, and may just be clutter, which leads to the next question)
5. Is there a place for this in my closet/house?
6. How many times will I use this?
7. If I’m using my credit card, will I be able to pay the entire balance in full?
8. Will this shopping get in the way of building my emergency and retirement funds?
9. Have I been shopping uncontrollably?
10. What void am I trying to fill with this activity?
Okay, I know you’ll say I’m such a K.J. (Kill Joy), reminding you to ask all these questions. But I do hope you consider answering them. In the Philippine setting, malls have become our recreational areas because we do not have parks. Malling has been a typical family weekend activity. Malls have been the venues where we spend time with our family - watch a movie, eat family meals, shop, even hear mass, visit the dentist, doctor, therapist, etc. and this has trained us all to become shoppers.
Christmas a fertile ground?
Filipinos are big on Christmas celebration. This could be a fertile ground for some Pinoy version of revenge spending. So many birthday parties, wedding receptions, summer vacations were cancelled because of the pandemic, that we can bring ourselves to irrational Christmas overspending to compensate for everything that we have missed out on during the last six months. It could also be a way to forget all the bad things happening in the country and the world.
But revenge is never good. It may make you feel good momentarily but it usually backfires. Don’t let this happen to you.
Cheers to high FQ!
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ANNOUNCEMENTS
1. This Saturday I will be speaking at the AXA Conversations. Get in touch with them if you want to join or click http://bit.ly/HealthFinPlan. Limited slots only.
2. If you think your kids and you need extra tutoring help from Singaporean experts, check out 88tuition’s website and try their 14-day free trial, limited to 12 lessons. Click 88tuition.
3. Reading is a good coping mechanism for the lockdown. If you haven’t yet, may I invite you to read any of the FQ Mom books?
Attributions: Photos from freepik.com modified and used as cover for the article.
