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Old 01-30-2009, 05:08 PM   #21
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I don't see how this goes against the withdrawal plan. Outside of my retirement savings I hold an account that is used to save up for spending on "luxuries" such as a replacement car, vacation etc.
Indeed. There's a strong argument to be made, for example, for withdrawing as much as you can from an IRA or 401K in (say) the 15% tax bracket and saving the excess cash flow in another savings account and/or taxable investment account. That could be one source for these occasional splurges.
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Old 01-30-2009, 05:41 PM   #22
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I don't see how this goes against the withdrawal plan. Outside of my retirement savings I hold an account that is used to save up for spending on "luxuries" such as a replacement car, vacation etc. There is nothing that says that you have to spend everything you withdraw in the year you withdraw it.
Maybe it is semantics. I had planned to do the "take 4% of my portfolio value each year" approach to retirement spending. However this would mean spending more in good years in the market, when prices would generally be higher, assuming strong correlation between prices of goods and services and prices of securities. Then in really bad market years, when prices are lower, I would have less discretionary funds to spend on the goods and services that have dropped in price.

I guess I could have a "bucket" of unspent money that rolls over year to year and goes unspent. But then I am really changing my asset allocation to slightly more cash.

Not sure if I will employ the full "3 bucket method" or not, but I guess a single extra "income smoothing" bucket will probably be used at a minimum. This "income smoothing" bucket is somewhere that unspent funds from a great year can be held (on paper) to be spent in later years that are not as great.
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Old 01-30-2009, 06:04 PM   #23
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I just looked at my most recent bank statement, and I am spending a little more than in previous years.

Actually I intended to spend more, due to changing circumstances, but last month I used less than half of my planned spending increase.

I am waiting for all the Great Wonderful Retail Deals we are supposed to be getting sometime soon. So far, I haven't seen any deals on things that I wanted that were worth bothering with. Also I am trying to save extra to make up for the $10K given to my daughter in November for her wedding. Still, I bought a few things for myself and I am doing my best to stimulate the economy through a moderate level of retail therapy.

Any stocks that I might buy will have to come from rebalancing, since I don't intend to add to my investment portfolio with this year's income. I will use all that I can save for one time expenses in 2010 - - my first year of ER when I hope to move north.
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Old 01-30-2009, 06:05 PM   #24
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I guess I could have a "bucket" of unspent money that rolls over year to year and goes unspent. But then I am really changing my asset allocation to slightly more cash.

Not sure if I will employ the full "3 bucket method" or not, but I guess a single extra "income smoothing" bucket will probably be used at a minimum. This "income smoothing" bucket is somewhere that unspent funds from a great year can be held (on paper) to be spent in later years that are not as great.
I like to minimize ups and downs and have always been this way. As a kid I watched my mother divvy up my Dad's weekly pay packet each week, putting money into different tin cans for the monthly bills that were to come, putting some aside for the week's shopping, giving some to my Dad for "spending money", and the rest into their savings account for future purchases.
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Old 01-30-2009, 06:40 PM   #25
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I am waiting for all the Great Wonderful Retail Deals we are supposed to be getting sometime soon. So far, I haven't seen any deals on things that I wanted that were worth bothering with.
Yeah, the hopes for great retail deals have mostly been overblown.

But if you're in the market for a vacation... these are the best deals I can ever recall seeing, and by a fairly wide margin (adjusted for inflation, obviously).
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Old 01-30-2009, 06:49 PM   #26
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Yeah, the hopes for great retail deals have mostly been overblown.

But if you're in the market for a vacation... these are the best deals I can ever recall seeing, and by a fairly wide margin (adjusted for inflation, obviously).
Last weekend we went and bought "rail rover" tickets for a 3 week vacation in England at the end of April. The pound is down to $1.45 compared to $1.99 exactly a year ago.
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Old 01-30-2009, 08:03 PM   #27
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Worst possible place to try and save.

Just one of many, many articles:

Little secrets of 'out-of-business' sales

Good article; something to keep in mind. Doesn't change my basic premise, though, that when prices are down (rather than up) it's time for folks like me to be on the lookout for bargains.
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Old 01-30-2009, 08:11 PM   #28
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it's time for folks like me to be on the lookout for bargains.
You'll get no argument from me on that... folks like me, also.
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Old 01-30-2009, 09:19 PM   #29
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I hope this isn't too off-topic... this is a reason DH is so torn about staying in his job or quitting. As soon as he quits we want to travel and now there are lots of travel deals. So, does he stay to save more money or quit to take advantage of a time when there are deals (then stop traveling in time to catch the very bottom of the housing market?)

Its a conundrum.
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Old 01-30-2009, 09:30 PM   #30
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Is anyone spending more money now during the current economic downturn than previously?
Some of our spending has been constrained by supply & demand. If we'd tried to get contractors into a home in 2006-7 we would've been waiting weeks for them to return our phone calls. So the money doesn't get spent.

Now, however, everybody's happy to see us! The recent "home show" was full of eager vendors and sparse crowds. We're getting our FuturaStone driveway/lanai replaced with stamped concrete and repairing some deteriorating lava rock steps. Home Depot is thrilled to refurbish a master bathroom counter/cabinets. A local cabinet-refacing store is happy to work on the other bathroom, as long as it doesn't conflict with the guy resurfacing the 30-year-old bathtub. The rental home's solar-powered attic exhaust fans went in yesterday and next month we're resurfacing a lanai roof and installing new skylights. I ask an acquaintance at the solar supply store to let me know when he's selling a cheap 5-7 KW inverter at a deep clearance discount.

We're also seeing great bargains on Craigslist-- lots of high-end furniture, appliances, & store gift cards. We're always looking because we never know what we'll lust want, but now the shopping is a lot easier/cheaper. And if another kilowatt of photovoltaic panels is selling for under $4/watt... well... I can always store them until I get around to installing them.

I haven't priced Norwegian Cruise Lines, but in the last year they've gone from three interisland ships to one. Now I'm seeing ads for onboard credits and other freebies. My impression is that a last-minute passenger could drive down to Aloha Tower Pier 10 on a Friday afternoon and score a great deal on an interisland cruise leaving a few days later.

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Has anyone given this much thought from an asset allocation/spending perspective? In other words, does anyone save cash in a rainy day fund waiting for an economic downturn to buy large capital goods and services?
You mean, other than Warren Buffett?

Spouse has talked about "taking some off the table" during the next big market runup. We're still discussing exactly what that means.
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Old 01-30-2009, 09:30 PM   #31
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I hope this isn't too off-topic... this is a reason DH is so torn about staying in his job or quitting. As soon as he quits we want to travel and now there are lots of travel deals. So, does he stay to save more money or quit to take advantage of a time when there are deals (then stop traveling in time to catch the very bottom of the housing market?)

Its a conundrum.
Cheap travel deals should not be the key decision in your decision to retire. If you are FI and just marking time, then may be this could be the trigger but you need to be sure of your finances.
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Old 01-30-2009, 09:42 PM   #32
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If you are FI and just marking time...
Ding, ding, ding!

Our situation is complicated by being on a lucrative international assignment and having an older dog. But that is really OT, so I'm just focused here on the fact that we'd like to be out there taking advantage of the deals, but we aren't for now.
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Old 01-30-2009, 09:51 PM   #33
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Ding, ding, ding!

Our situation is complicated by being on a lucrative international assignment and having an older dog. But that is really OT, so I'm just focused here on the fact that we'd like to be out there taking advantage of the deals, but we aren't for now.

Then just do it. Why wait "one more year". Life is too precious too waste on accumulating wealth.
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Old 01-31-2009, 04:42 AM   #34
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I've reduced spending 38%, but I'll probably use the savings to rebuild my deck this summer.
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Old 01-31-2009, 08:54 AM   #35
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Some of our spending has been constrained by supply & demand. If we'd tried to get contractors into a home in 2006-7 we would've been waiting weeks for them to return our phone calls. So the money doesn't get spent....

Now, however, everybody's happy to see us! The recent "home show" was full of eager vendors and sparse crowds....
Good point. With snow on the ground here and the supply-demand situation you describe, it's probably time for me to make a list of things I can't/don't want to do myself and get some estimates.
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Old 01-31-2009, 09:00 AM   #36
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I'm with Nords on the finally being able to get more reasonable things done on my house . So I'm definetely going to do over one bathroom ,add some landscaping near the pool and recarpet and paint two rooms . My travel plans are pretty much family oriented this year but I'll probably also grab a bargain cruise .
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Old 01-31-2009, 08:46 PM   #37
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Is anyone spending more money now during the current economic downturn than previously?

I've been cutting food bills drastically, and gasoline costs for myself by staying home more during the day, but that has nothing to do with the economy.
It has more to do with the 12 day Mediterranean cruise we've been saving up for well over a year. Balance is due in April, and then we need to keep saving up for shore excursions. After July 09, we will be back to our normal "mad money budget". But I believe we will continue to live more cheaply. Why not?
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Old 01-31-2009, 09:21 PM   #38
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I'm not spending more now. I'm just glad we were spending well and gifting money back in late 2007 when things were flush. I'm really glad we withdrew from the retirement fund to buy our motorhome in 2005 when things were flush - otherwise the money would just have gone "poof" in 2008. Now we'll just keep out spending steady and not go hog wild. Not reigning in spending either. Staying invested for sure.

Audrey

P.S. We did some of regular annual maintenance/service on our motorhome last week. Both facilities we visited were not nearly as busy as a year ago. Never seen the service departments so empty! Usually they are overflowing. Now they look like 75% of capacity. Nice for us!
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Actually, we are spending more
Old 02-01-2009, 07:40 AM   #39
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Actually, we are spending more

Yes, we are spending more. However, we have always lived way beneath our means and even with the extra spending, we are still socking away quite a bit of money.

We tried and failed to sell our house last year -- then the economy tanked even further. Almost nothing is selling in our area, so we haven't decided whether or not to try sell this year. My husband thinks maybe he will work another year or two, or until his company eliminates his job (haha or not so funny). To make ourselves more comfortable, we are buying a few items that we were putting off till we retired and relocated.
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Old 05-28-2009, 01:34 PM   #40
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To revive the thread, anyone spending more now? Things are starting to look positive for the economy. Has anyone that had increased their savings over the last year decided that their emergency fund was large enough and now is the time to splurge and take advantage of some cheap prices on things?
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