If there is one time to have money and spend money, it’s during a pandemic. Money should help make difficult times more bearable. If you can’t afford to spend extra money during a pandemic, then you can always revenge spend once the pandemic is over.

Revenge spending is a way to make up for tougher times since the lockdowns began in early 2020. Further, revenge spending may help you feel better about politicians locking you and your business down while they still get paid with benefits.

However, perhaps not everybody should revenge spend. Let’s go through some criteria that should probably be met before splurging. Perhaps meeting at least three of the criteria before revenge spending is the responsible thing to do.

Reasons To Revenge Spend

• Didn’t leave your house to do anything fun for more than six months

• Didn’t visit friends or relatives for more than six months

• Held onto your investments through the worst of the crisis

• Added more to your investments during the worst of the crisis

• Juggled work and parental duties full-time for more than 10 months

• Held onto your job for the duration of the pandemic

• Kept maxing out your 401(k) and saving 20%+ of your after-tax income

• Started a new project or side hustle that is making money

• Finally launched your own website that cannot be shut down by the government during a pandemic

• Improved relationships with your immediate family members

• Worked as a frontline worker during the entire pandemic

• Showed empathy and kindness to others with your time and money

• Didn’t catch COVID or give anyone COVID

• You have a multi-bagger investment gain

• You smartly took advantage of record-low mortgage rates and refinanced.

Reasons Not To Revenge Spend

• Got COVID-19 and spread the virus to others

• Refused to wear a mask and respect other people in public places

• Didn’t take up any hobbies or start any side hustles

• Stopped working on your website or side hustle during the pandemic

• Decided to quit your job instead of negotiate a severance when negotiating a severance has never been easier

• Made no improvements in any areas of your life

• Gained more than 5% of your body weight

Personally, I’d rather revenge spend after making more money or doing something good. This way, spending money feels more rewarding.

However, for those of you who are pissed off that your personal liberties were taken away for so long, revenge spending is one way to make yourself feel better as well.

Why You Should Revenge Spend More Money

The pandemic reminded us about three things:

1) Tomorrow is not guaranteed. We better make the most out of each day for today could be our last. The YOLO Economy is going to be amazing as people live it up more.

2) To make money, it’s better to be an asset-owner than a laborer. With risk assets surging to all-time highs and service economy jobs still way down, there has never been a more clear reason to be an investor.

3) Consumption smoothing is difficult. For the investment-minded individual (that’s you), during times of uncertainty, you tend to hoard money and not spend. You then tend to keep aggressively saving long after the worst has passed.

During good times, you then tell yourself to save for the impending bad times, which is still fresh in your memory. The cycle repeats until you are left with more money than you need. This is great if you are following the Legacy retirement philosophy. However, there comes a point where you are saving way too much.

Of course, if you are struggling to make ends meet, please do not revenge spend. But for those of you who’ve been able to maintain or grow your net worth during the pandemic, a session of revenge spending is encouraged. Otherwise, there really is no point working so hard and saving so much.

Hoarding Massive Wealth Is Stupid

Imagine being worth $100 million. Would you bother continuing to work at a job you hate? Heck no! Yet, I know guys who do just that because they want to be billionaires. They think they won’t be happy until they achieve such a milestone. Nuts!

Because of their inability to consumption smooth, upon death, they will likely have to pay at least $40 million in estate taxes to the federal government.

Sure, they could set up a GRAT and other things to try and reduce their estate’s tax liability. However, at their net worth trajectory, paying a lot of estate taxes is an inevitability.

It would be much better if they spent the money or gave it away while they lived. The same goes for all of us.

Personally, I plan to revenge spend in 2023 as part of my goals. After writing Buy This, Not That, a Wall Street Journal bestseller, being a stay-at-home dad to two kids, and working on Financial Samurai, I need a break!

As a 46-year-old this year, I am in my first year of decumulation mode. I do not plan to die with a lot of money because I don’t want to have wasted my time and energy.

Spend To Conquer A Scarcity Mindset

Revenge spending is an exercise to help break the scarcity mindset. One of the reasons why we save during bad times and good times is because we consistently fear bad times will come again.

I have been diligently saving 50% – 75% of my after-tax income since 2000 because I saw so many people get let go during the 2000 dotcom collapse. Then came the 9/11 terrorist attack. Then the 2008-2009 financial crisis really knocked us out for several years. And now, of course, it’s the global pandemic.

Shoot. I don’t even have a job and I’m still worried about a job loss!

As a father, my mind is always wondering: What else bad is going to happen next?!

Unexpected bad things can and will happen. As a result, I bet there will be a whole new generation of money hoarders for years to come.

The longer you live, the more good things will happen to you. Unfortunately, the longer you live, the more bad things will happen to you too. We tend to remember the bad events more than the good events.

Don’t let the global pandemic permanently lower your standard of living for the rest of your life. Course correct through revenge spending.

If we can’t spend money during bad times to make our lives better and we can’t spend money once the bad times are over, then when can we ever spend money?

Revenge spending helps break the scarcity mindset cycle.

Determining How Much To Revenge Spend

Let’s say you’re used to being frugal for years. Instead of going on a multi-year-long revenge spending binge where you often find yourself passed out in a luxury suite in Vegas, start small and revenge spend your way up.

Starting small can include revenge spending for just a week or only during holiday sales. Starting small can also include revenge spending on lower-ticket items first. I suggest you do both.

The idea is to slowly cure your frugality disease or money guilt by changing your habits one little step at a time.

I’ve suggested a good spending ratio of 2:1. In other words, spend $2 on something beneficial, like an investment for every $1 you spend on a splurge.

Responsible Methods To Revenge Spend

Another way to revenge spend is to follow my 10X Investment Consumption Rule. The rule states that if you want the latest $1,000 iPhone, then you best make at least a $10,000 return on an investment to pay for that unnecessary item.

However, the 10X Investment Consumption rule is also born out of a scarcity mindset. It often takes a very long time to earn 10X more than the cost of an item you want to buy.

Perhaps the most responsible way to revenge spend is to take 10% of your annual investment returns and blow it on whatever you want. This way, you’ve still got 90% of your investments hopefully working for you. You’re also not paying a lot of taxes and you’re rebalancing your portfolio.

If you tether consumption to investment returns you will never go broke. You will also likely eradicate any money guilt you have for spending money.

Desperate times often lead to desperate measures. I’ve noticed several money scams during COVID-19 we should all be aware of. If you know of more money scams, please share them in the comments section below.

It makes me so mad that there are scammers out there. I’ve been scammed before, and it felt terrible. But at least when I was scammed I was younger and it wasn’t for a lot of money. After I was scammed, I became much more vigilant.

This post will look in depth at the average net worth by age for the upper middle class. The upper middle class, aka the mass affluent, is loosely defined as individuals with a net worth or investable assets between $500,000 to $2 million.

The upper middle class is also sometimes referred to as the aspirational class or HENRYs. HENRY stands for High Earners Not Rich Yet.

Some also define upper middle class as those who are college educated with incomes in the top 15%. A top 15% income is roughly $100,000 or greater for households or $65,000 or greater for individuals.

The upper middle class is an aspirational class that many aspire to achieve. With enough hard work, determination, and a long enough life, many of us can achieve upper middle class status. To folks, having status is even more important than money.

The upper middle class didn’t inherit their money. They mostly earned it through hard work. On the other hand, getting rich with a net worth of above $10 million often takes a tremendous amount of luck.

The Middle Class And Upper Middle Class Are Different

The middle class is different from the upper middle class. The middle class is defined as those earning between 67% and 200% of the U.S. median household income. The Pew Research Center defines middle-class households as those .¹ That’s between $42,330 and $126,358, using the U.S. Census Bureau’s 2020 median income of all households.

We can also define middle class in terms of net worth. According to the U.S. Census data, the average net worth for U.S. households in 2022 is about $300,000. The median net worth is about $100,000. In other words, wealth is concentrated at the top.

We all aspire to be upper middle class or rich. However, statistically, it’s not possible. Therefore, it’s worth discovering other ways we can feel rich without actually being rich.

On July 15, 2009, I introduced the Go Broke To Win Big budgeting system to help readers better manage their money. Today, having a strong budgeting system is more important than ever. There is so much uncertainty in the world, having a financial plan is supremely important!

The Go Broke To Win Big budgeting system enabled me to leave the rat race in 2012. It also enabled my wife and I to remain disciplined financially, despite a raging bull market that ensued.

Now that economic uncertainty has returned, the budgeting system has provided us much-needed calm. Perhaps this budgeting system will help you boost your finances over the years as well.