Don’t let your spending splurge become a habit

by By Empower Retirement

You’ve probably seen it for yourself. Mall parking lots are filling up. Cash registers are beeping. And people are opening their wallets again. Many of us are witnessing something of a post-lockdown spending splurge as people indulge once again in retail therapy.


It’s no surprise that after months of being homebound with limited options to spend, people are once again looking to travel, shop, eat out and celebrate. But even though it’s understandable that you may want to indulge a little, remember that you also have other financial goals you want to pursue—including saving for retirement.


According to one study, 44% of people say they are now willing to go into debt to treat themselves post lockdown.1 Compare that to another finding that 48% of households headed by someone 55 and older lack some form of retirement savings.2


An occasional — and affordable — splurge is fine. But accumulating additional debt to bankroll your fun will only hurt you in the long run, especially at an average credit card interest rate of more than 16%.3


During the pandemic, researchers discovered a sizable increase in Americans’ savings as a percentage of disposable personal income, from 7.2% in December 2019 to a record high of 33.7% in April 2020.4 And from March to April of 2020, Americans’ average savings rate nearly quadrupled. If you’re one of the people who got into a saving habit during lockdown, why not make the habit permanent and increase the amount you contribute to your employer-sponsored retirement account? Through the power of compound growth, any earnings your contributions generate get reinvested and can generate additional earnings. That way, you may have even more available to splurge with when you can enjoy it in retirement.






1, “Almost half of Americans are willing to take on debt in a post-pandemic spending splurge,” June 9, 2021.

2, “Nearly Half of Americans 55+ Have No Retirement Savings,” March 28, 2019.

3, “Average Credit Card Interest Rates,” September 15, 2021.

4, 2021 Spring Ten Magazine, “Study shows surge in savings during the pandemic,” April 29, 2021.