when is it ok to spend?

[ER Eddie]

Odd messages from higher plains. Sounds almost poetic. I’d go with it.

Thank you, I will. The message may have come from my father, who died a year earlier and left me some money. It was enough to move my ER date up about 5 years and make the retirement much more comfortable. I am grateful.

I think he was saying, "Stop being such a tightwad. Enjoy the money. That's what it's there for." Maybe also, "That's why I gave it to you."

As I get older, I'm shedding my frugal ways. As one gets older, it becomes ok to spend. Isn't that the purpose of saving for almost all of our lives?

Right. That's what it's for.

 

[walkinwood]

For you old timers: how have you navigated this up and down psychologically? Do you just keep your frugal pants on tight no matter what? Or is there some way you are able to feel out loosening the belt?

PS I don't want to die with a million in the bank. I'm more interested in making the most of what I've accomplished while still on the planet.

We have an annual budget based on our chosen withdrawal method. We spend up to the annual budget without giving it any thought. Going over requires a discussion.


For some, the joy (loosely put) of having a large stash of money outweighs the sorrow (again, loosely put) of dying with a large amount of money in the bank. This is a hard truth to swallow, but think about it. Also there is a range there - from spending it all to keeping it all. You just need to find your optimum space. And there shouldn't be a rush to determine that space either because it will change in your life time.


We're in our late 50s and the "joy" (security may be a better word) of having a large stash keeps us using a very conservative withdrawal method. Our budget more than meets our needs, so we don't feel deprived. However, I think we'll spend more liberally as we age. We've already seen that happen in the 11 years that we've been retired.

 

[Freedom56]

We are both under 60 and I'm in my 4th year of retirement. We contine to spend most of our money (after income tax) on travel and leisure an spend pretty liberally, yet we haven't even put a dent in our investment accounts as they have continued to grow. We stopped buying junk we don't need (we have three homes full of stuff). I would recommend starting to live a little and travel in style and comfort (fly business class and stay at nice hotels). Go to fine restaurants. Invest time and money in your hobbies. Visit countries like Austria and Switzerland which are breathtaking and will help drain your funds. I have seen too many people who have been frugal far too long, lived like hermits (well sort of ... sitting at Starbucks for hours with a coffee and their laptop) only to become ill and now regret not spending more time and money on travel and leisure. Life is finite. Your ease of mobility is finite. Enjoy it while you can.

 

[dtbach]

I got a nice inheritance from my folks which was nice but really not needed. My mother was also super frugal and didn't spend much at all as the money was "needed for our old age" (I believed my father suffered from this). So they both passed away into their 90's and never did stuff they wanted to do.

I learned from this. You only get so many circles around the sun. No more "inside cabins" or "Econo Lodges" for us. Buy great steaks, and decent wine. I'll still leave more for the kids than they need.

 

[TDub]

We always keep our goals in mind. I have always spent whatever I wanted, as long as it wouldn't stop us from attaining our goals.



That said, I have always hated waste. So I never spent just because I had money.

This is exactly it.
As long as you’re hitting your goals, you’re golden!

 

[skipro33]

Look, I retired early to relax, forget about money and enjoy the simple pleasures by taking my time to actually enjoy them. If I didn't think I had enough to retire when I did, I would have worked another year, then re-evaluate the situation then. If you are going into retirement fearful of outliving your money or worse; not enjoy your hard earned savings and investments, then you need to get right with that.

If my funding for early retirement took a serious hit, I'd be just as happy poor-boying it like I did when I was saving for this time. As long as I don't have to go back to work to feed myself, I'll always be happier than when I was working in order to feed myself.

 

[Teacher Terry]

My parents did it right by spending their money and enjoying it.

 

[iloveyoga]

I have not had much trouble with spending! I keep looking at all the different measures to be sure we are secure now and in the future. Watching my folks decline so quickly has also spurred me on.

 

[street]

When is it OK to spend >>> Well we get what we need and what we want but still don't spend just to spend. I would say we will maybe never spend money on things just to spend more money. I'm fine with leaving to my son and charity.

 

[jabbahop]

It's a good question, as so much of our working life we were focused on accumulating. Then once over the transition to withdrawal mode it takes a different mindset than we are accustomed to. For me it has been tough since I did several things right after retiring that spent a lot of money:

We had the same experience the first few years - lots big expected and unexpected expenses. While were were still under a 4% withdraw rate, we were much closer to it than we had budgeted/wanted to be.

- replace two old cars
- replace a roof
- repaint/repairs for our downsize home
- big family trip for son’s college graduation

Fortunately these these “extraordinary expenses” have subsided and we are back on our expected glide slope.

 

[RenoJay]

I’ve decided that I’ll spend generously when others are involved and be frugal when it’s just me.

 

[JJpop]

Yes it can be difficult to change your ways.I finally convinced my wife on this spending plan.....we will add our SS to the yearly interest paid out on our investments and subtract our normal expenses and taxes.That figure we can spend on travel,gifts and family vacations...or any extra medical bills.This will allow us to leave a good inheritance to our kids,maintain the balance in our account and have no guilt or worry about spending.When I turn 70 in a couple years we should have about 40,000 extra to spend in a normal year.If we do not spend it all it carries over to the next year.I am anticipating some great vacations for our grandkids.

 

[PhoneCzar]

Great topic! I know there have been earlier variations on the theme but, for me, it boils down to a “thinking” transition. I will be retiring at the end of August… (brief pause here to let that thought wash over me again…Ahhh)… It is my thinking that gets in my way of enjoying the “now”. I should be lifting my head up from the daily plodding to see that up there, in the near distance, freedom stands ready to walk with me. Yet I keep thinking that I have to continue the income stream flowing. For God’s sake, I have been doing that for more years than I care to remember. I have built the assets for these last years. Chill! There is enough if I am willing to believe Firecalc, Fidelity, Vanguard,… yada yada.
These discussions illuminate the matter quite clearly for me, which is that I need to “FREAKING RELAX”. Today’s chapter is closing and a new one awaits. It will require new thinking and new concerns. The past 33 years demonstrate I can handle the challenge.
Smoke ‘em if ya got ‘em!

 

[meleana]

I'm 63 and retired (forced out of my job) and husband is 65 and retiring the end of this year.

I know we will be very careful and frugal as we always are anyway- especially for the years leading up to age 70 when we finally will get our SS checks.


Living solely on our savings in the meantime scares the hell out of us since we have no pensions. Not to mention having to pay for Medicare and health insurance for me until age 65, when I go on Medicare.

 

[meleana]

The main one that comes to mind is spending more than the absolute minimum on flights, hotels, and AirBnb rentals. I've realized that comfortable travel and lodging is very important to me, and since I am spending far less overall than FIRECalc says I can, I have loosened the purse strings in these areas. For example, I'll book a flight that leaves at 10:30am as opposed to 7:30am even though it may be $30-$40 more, because I loathe getting up at 5:00am to rush to the airport. I'll also spend more to rent a comfy, secluded, highly-rated AirBnb apartment instead of settling for a 2-star hotel/motel room that is likely to be noisier, shabbier, and possibly dirtier.

One other category that comes to mind is wine. I'm much more likely to spend $20, semi-regularly, on a really good bottle of "reserva" Tempranillo than I used to be. As the saying goes, life's too short to drink cheap wine, and since my budget easily allows for it, I'm getting more comfortable paying for (and truly enjoying) the good stuff.

I have realized the same with travel. I like flights a little later in the morning. I also will take a car service to the airport and back. Adds a lot of $$ to the trip, but I don't care. Trip coming up we also are coming home on a Sunday to accommodate staying near the airport the night before the flight since the airport is far from the resort we are staying at by 3 hours. This has annoyingly added over $300 to our airfare.



Same with lodging. I like superior accommodations -condos with kitchen-pools, spas and so forth- but we will eat breakfast and some dinners in. Trip coming up it is costing us over $2000 to stay at the gate of the national park we are visiting (6 nights).



Now- when it comes to wine- my favorite is Almaden boxed Rhine wine....

 

[Physics Guy]

I'm fairly sure I've contributed to at least one other similar thread (but I can't be bothered to search them all for my contributions).

As I (we really) approach retirement I can see the same issue appearing. Not with lifestyle - we enjoy our current lifestyle - but with hobby expenses. I have tended to be cheap in my hobbies (video games, reading, and messing around on the internet) but I have also been able to satisfy my DIY puttering desires through my job. When I do fully retire I will want more tools, materials, and possibly space for puttering around making things (or playing at making things). I can look at numbers and see that it works but convincing myself to spend multiple hundreds of dollars on tools and supplies is difficult. This is especially difficult when some of the things I want to work on have no practical value. The stock answer is too get good enough to sell things but I have little desire for that because it brings back in the idea of working to please someone else instead of just for my own enjoyment.

 

[Ronstar]

... When I do fully retire I will want more tools, materials, and possibly space for puttering around making things (or playing at making things)......

tools - Yes, materials - Yes, and space - yes. (Feel free to insert certainly instead of possibly.)

I went through the same exercise before I retired. I bought tools and started making things. Which lead me to want to make different things - which lead me to buy more tools - which lead me to overflow my workshop space and take over parts of the attached garage and basement for making things.

You won't be able to avoid it. You might as well accept it.

 

[Physics Guy]

@Ronstar

I agree. I've accepted it but I'm not sure my DW has accepted it yet. On the other hand I'm also warring with my desire to move to a location that will likely mean the loss of my suburban US house and all the associated garage, basement, and yard. A Makerspace membership might be in my future.

 

[pc95]

Though not retired yet, we spend quite a bit of extra money on food and travel- we find them worthwhile splurges. Food is numero uno. Unfortunately we live in an expensive city so housing cost is a waste (not really a splurge as we dont have control). Following retirement although we like the city, we may very well move somewhere else.