when is it ok to spend?

[tmitchell]

This is more of a psychological question but once you've amassed a decent nest egg, how have you all navigated the push/pull around spending/frugality?

For the longest time I've chosen to forego today in service of tomorrow in terms of saving/spending, but as I find myself with more than "enough" I find myself struggling a bit with taking my foot off the brake and allowing myself to enjoy the fruits of my labors so to speak. (I'm FI but not "fat" FI yet...nor am I sure that's a necessary goal.)

Right now I also have fear around the idea that we're "at the height of the market" and I'll be back in the thrift store by year's end and struggling to feed the kids.

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.

 

[GrayHare]

I now trade money for time. If it costs a bit more but leaves me time to do something else, I'll choose that option whereas I did not in the past. It's the closest one can get to buying time.

 

[USGrant1962]

... how have you all navigated the push/pull around spending/frugality?

...

Really interesting and deep question for this cohort.

DW and I are naturally frugal, which contributed to our ER. I think we struggled with the transition from accumulation to deccumulation a little. But in the end we became comfortable by setting a budget and transferring $XX per month from our portfolio at Vanguard to our credit union.

I guess our bottom line is we set a budget that was confirmed by FIRECalc and other calculators, transferred that from portfolio to bank, and worked within that.

 

[Mr. Tightwad]

I'm a tightwad and always will be a tightwad. But I spend money on things that make my life better.

 

[audreyh1]

This issue has been discussed here several times recently. Not easy to search for though. Maybe other forum members remember some thread titles.

For us our income keeps exceeding our spend so we loosen the purse strings every year.....

 

[FlaGator]

Maybe it is time passing without a blow up?

I’m 4+ years without a paycheck and still under 60. Was very, very careful with spending for the first few years.

Have loosened up a bit in the last 6-9 months after realizing I’m better off than forecasted at this point, even after some mediocre market years.

 

[bbbamI]

We ran calculators, kept numerous spreadsheets, etc a few years before retirement. Everything looked great. However, when retirement was upon us, it was a bit daunting. We watched our expenses like a hawk, but after two years, we realized our plan was working. It was time to exhale and have a little fun.

We were both retired in February, 2009. So far, so good.

 

[audreyh1]

We ran calculators, kept numerous spreadsheets, etc a few years before retirement. Everything looked great. However, when retirement was upon us, it was a bit daunting. We watched our expenses like a hawk, but after two years, we realized our plan was working. It was time to exhale and have a little fun.

We were both retired in February, 2009. So far, so good.

That was an exciting time to retire!!!

 

[daylatedollarshort]

We're into low consumption / sustainable living so we try to avoid buying a lot of consumer goods. I'm okay with leaving money to charities and our kids so they can avoid soul crushing mega corp jobs and retire early, too.

 

[Telly]

When is it OK to spend?

What!? Spend!? You'll be eating your seed corn!
And "$40 million will be gone in no time with store-bought soap!".
I've got the See-ment pond, but the lye fumes would blow right into the house with the prevailing winds, so store-bought soap is slowly draining the funds.

 

[gcgang]

Just start spending. You know you can always go back to super frugal ways.

 

[Spock]

We added a "mad money" budget allocation that we can adjust up or down based on the math.
I have noticed a big difference in how my wife spends mad money. If she has a separate physical envelope with cash in it, she spends it and knows to the dollar how much is in it. If its a verbal allocation in the checking account, its much more "spurty"... normal frugality with spurts of "WTH YOLO".

 

[Col. Klink]

I guess our bottom line is we set a budget that was confirmed by FIRECalc and other calculators, transferred that from portfolio to bank, and worked within that.

+2 If you (and significant other, perhaps) set a budget that works and live within the budget, the question of being too frugal or living too large becomes moot.

 

[Midpack]

It’s a great question, but I’m not sure there’s a universal answer. There are plenty of articles on the subject online, a few links below. maybe one of them will ring true for you.

My random thoughts. We’re spending a little more than our final years working, but not much - 20-30%? We have more than enough based on any calculation, and we splurge when we feel like it (on wants) but we are very careful about systemic increases to our budget (our needs). How aggressive you can be with spending depends largely on your “secure income” like Soc Sec, pensions, annuities versus your nest egg. Our nest egg has to last 30 years, and our portfolio will be most of our income. We’ll adjust as we go and decrease or increase spending as needed every five years or so. As for spending it all, I spent years trying to figure out how to “die broke” - and it’s really not possible unless you put everything you have in annuities - something I’d strongly recommend against. YMMV

https://money.cnn.com/2018/01/10/retirement/retirement-spending/index.html

https://www.aarp.org/retirement/pla...info-2018/retirement-spending-suze-orman.html

https://www.schwab.com/resource-cen...rule-how-much-can-you-safely-spend-retirement

https://www.bankrate.com/retirement/frugal-retirees-go-ahead-spend-your-money/

The transition from saving to spending from your portfolio can be difficult. There will never be a single “right” answer to how much you can spend from your portfolio in retirement. What’s important is to have a plan and a general guideline for spending—and then adjust as necessary. The goal, after all, isn’t to worry about complicated calculations about spending. It’s to enjoy your retirement.

 

[Nick12]

" Focus on the journey not on the destination. Joy is found not in finishing the activity but in doing it" -Greg Anderson

It's ok to spend on things. Most of my life the action on accumulating wealth thru investnents, frugal living etc was and always will be my drug. It's an incredible feeling. I still am frugal but learned to kick back and relax after I FIREd last year. Even before my father passed away a few weeks ago after his battle with COPD, some of his last words to me was " Go and spend some money". RIP Pop.

 

[joeea]

Right now I also have fear around the idea that we're "at the height of the market" and I'll be back in the thrift store by year's end and struggling to feed the kids.

Is this fear realistic? What's the real chance that in 8 months you will be struggling? How close are you to the line?

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?

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.

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.

What does "making the most" mean to you?

 

[marko]

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.

+1
While working, we just had a certain lifestyle and did our thing and banked whatever was left over.

Either through luck or planning --mostly luck-- our SWR falls right about in line with what our lifestyle spending requires.

As such, how we live is the regulator on our WR instead of the other way around; it just so happens to be about 4.5% or so; sometimes a little more, sometimes a little less.

We certainly don't deprive ourselves!! but our spending is fairly consistent year over year with the same money spent but often on different things.

 

[audreyh1]

We do have a budget - really just an annual spending amount with a few broad flexible categories. We don’t blink an eye if we stay within it. If we go above we review a bit, and usually increase the budget for the future. So far it’s not exceeded what our resources can support long term.

The thing is, if you have the funds, and don’t spend it now, or put off things you really want to do, you might not have a chance in the future.

 

[ocdokie]

This is more of a psychological question but once you've amassed a decent nest egg, how have you all navigated the push/pull around spending/frugality?

For the longest time I've chosen to forego today in service of tomorrow in terms of saving/spending, but as I find myself with more than "enough" I find myself struggling a bit with taking my foot off the brake and allowing myself to enjoy the fruits of my labors so to speak. (I'm FI but not "fat" FI yet...nor am I sure that's a necessary goal.)

Right now I also have fear around the idea that we're "at the height of the market" and I'll be back in the thrift store by year's end and struggling to feed the kids.

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.

DH and I retired in 2010, aged 59 and 52. Until this year, we did indeed keep our frugal pants on tight. We finally feel comfortable enough to spend more money on our favorite thing -- international travel. We'd always flown in cattle class and skimped on lodging and food costs, and always had a great time.

This year, we blew some serious (to us) dough for an all-inclusive 3-week guided tour of Egypt, with some days on our own in Paris afterward. We had both really wanted to see Egypt, but that was one place where we didn't feel at all comfortable going solo. So, we took the plunge and had a great time. Yes, there was a little heart palpitation after totaling the costs, but we considered it money well spent. I don't think we'll ever spend as freely as Robbie B. (our inspiration) does, but we need to spend now while we're still able to travel.

Oh, and we're still great fans of thrift stores.

 

[RockyMtn]

I will be 10 years retired in July. It took me a good five years to kind of loosen up the spending habits. It was then that I realized that we would never spend what we had amassed and were missing out on enjoyment because of our frugality.

While the problem no longer exists to the extent it once did it does rear its head on occasion. Then it is quickly squashed!

 

[nativenewenglander]

We've always been very frugal, but have started spending more these last couple years. My wife gets a little nervous, but I try and show her we are more than OK. She's still not completely comfortable. We have no children, so if we don't enjoy it someone else will for sure. A new kitchen and bathroom are in the cards for the next year. The cash is already set aside for the work.

 

[Teacher Terry]

The first year we didn’t spend much money but the past 5 we have been traveling because you never know how long both will be healthy.

 

[Lsbcal]

Where I struggle is in the day to day decisions on little things. I'm trying to avoid the excessive focus on these things. Example would be: we went out to eat Saturday night, should we go out again mid-week? Should I buy those higher priced dark chocolate bars (after exercising a lot of course ) or go with the lower priced stuff? I mean, really life altering decisions.

More importantly one sets the yearly annual spending by using the analytical tools we have discussed a lot in this forum. Then you enjoy this and spend that annual amount and try to forget about all the negative news articles and such that cause fear/anxiety. You have already examined the worse case past stock/bond scenarios and selected a plan that works for those.

Just a few weeks ago I bought an Apple Watch. No regrets. Really enjoying it. It's no fun being too frugal and not enjoying your buying power. DW will be getting a surprise Apple Watch on Mother's Day from DS and myself.

 

[audreyh1]

Just a few weeks ago I bought an Apple Watch. No regrets. Really enjoying it. It's no fun being too frugal and not enjoying your buying power. DW will be getting a surprise Apple Watch on Mother's Day from DS and myself.

So what do you enjoy most about your Apple Watch?

 

[Lsbcal]

So what do you enjoy most about your Apple Watch?

Well it's like being a kid and having a cool toy. Here it is on my wrist:

It looks cool in a sporty sense which is just right for me.
Lots of ways to customize it and you can see my current choices.
I can receive calls while driving since our car doesn't have Bluetooth (too old).
I can call if I get injured out in the boondocks while running (peace of mind).
I can get very accurate walking/running stats since I'm a data junky.
I can see my activity levels (lower right on the pic) for the day. Includes standing up enough, exercise, moving calories.
When out for a run I can easily see pace and heart rate.
I use it with the reminder app "Due" to get notices of upcoming appointments or things to do.

etc., etc.