Can't stop savers mentality

[gayl]

So I hung it up February 1st 2017 but continue saving over 40% of my income. How did you switch from a saver to a spender mentality?

 

[shortstop14]

No longer having meaningful income worked for me.

 

[RunningBum]

What is this income? As ss14 says, for most of us it becomes a necessity. Some here don't spend all of their pension, SS and dividend income. If you're saving 40% of that, you worked way too long. Are you depriving yourself of things? If so, why? How nice would you like your tombstone to be? More info on your situation might be helpful.

 

[bingybear]

No longer having meaningful income worked for me.

+1
Since RE earned income went to zero. No pensions. No SS yet. I have not juiced the portfolio.... so I guess I don't save 40% or whatever it use to be.

But I'm not really spending either... with a few exceptions.... car and vacation. After you get accustom to a standard of living, it can be difficult to change.

 

[Chuckanut]

At the risk of being morbid, wait until some good friends and/or relatives your age or younger suddenly die of some accident or disease that came out of nowhere. You will probably decide to up your spending quite a bit.

That said, I have had the same problem and I still have to look in the mirror at times and ask 'What, exactly, are you waiting for?'

 

[shortstop14]

I can relate to some mental struggles moving from accumulation to spending phase - that's been discussed here pretty frequently. Fortunately, since I retired five years ago the markets have been kind and I haven't had to really feel the pain of assets decreasing due to spending.

But if you're living the life you want, and still saving - that's not really a bad place to be.

 

[omni550]

Hey, your heirs will be most appreciative.

omni

 

[gayl]

My net income is almost 3300 month from DBP + dividends, my savings is 1375 month (supposed to be 1000 for family vactions + 375 for GKS college but the 1st one's on full scholarship and no family vacation this past summer as oldest GS was helping his BF move home from a year abroad and oldest GD was volunteering in Costa Rica). At any rate, it will triple when RMD will be required. I became more of a minimalist after my son died and I needed to borrow money to bury him. Then that switch in my brain never switched off

I really need help figuring out how to switch off that saver mentality. I shouldn't have to justify purchases at the grocery store or clothing. But somehow I just can't break that habit. I really want help on how to do it

So for those of you who manage to do this, how did you do it? What was the overline factor that had you deciding it's okay.

My personal background: I'm single and was homeless for two times out of my life, I buried a son when I was struggling to keep up the mortgage paid leaving me on disability × 7 months, but I'm not there anymore

 

[bw5972]

So for those of you who manage to do this, how did you do it? What was the overline factor that had you deciding it's okay.

For me it was the acceptance of the fact that one day I will be dead forever. No need for a pile of assets then.

 

[RunningBum]

That's helpful with understanding why it's difficult to switch modes. It also sounds like the past year was more of an exception case since you had a plan for that 40%, it just didn't happen for reasons.

I wouldn't wait for RMDs to start taking out of your retirement if it's going to be 3X, because that will probably put you in a higher tax bracket. Think about shifting some of it to a Roth IRA at the very least, and also find a way to spend more.

For me I do a few small things like upgrading my flight to first or business class at least some times, and shopping local to support my friends' running store even though I could get shoes more cheaply online. I'll buy nice steaks at the grocery store because I'll enjoy it, and anything that looks good in the produce section to help me eat more healthily. I won't hesitate to buy new exercise gear if I'm pretty sure I'll use it, because it'll help my health. If you are into art at all, buy something you like at a local gallery. It sounds like maybe you need to get out of the mode of only buying the essentials.

 

[gayl]

Great suggestions, RunningBum

 

[foxfirev5]

My plan is self fulfilling as I spend what the portfolio generates. Why would I want to save more. By not touching the principal do I meet the definition of a saver?

 

[Meadbh]

Your situation differs from mine in that you have "income" from external sources in ER. If this income exceeds your expenses, either it must be very generous, or you are extremely frugal.

I have no external income; my taxable income is based on investment income. It's taxed whether I spend it or not. Every January I withdraw a predetermined amount, which is meant to cover expenses for the year (including taxes). I budget for my needs and I include budget lines for my interests, which include golf and travel. As long as my bank accounts remain in the black till the end if the year, I spend money as required. However, I do not spend like a drunken sailor. Of course, unexpected expenses will lead to a reassessment. Either I can choose to withdraw an additional amount (within my desired SWR) or I can economize for the rest of the year.

 

[imoldernu]

Interesting subject...
For us, frugality was easy.. The trick was not to miss anything along the way. I can't imagine anything that money would buy that would have made us any happier. It was a game that became a way of life. If we missed anything along the way, we never noticed.
Even today, saving is a game. Anything we want, we can afford, and can't imagine where we'd spend the money, even if we won the lottery.

Of course part of that is old age, where we have no one to impress, nowhere we'd like to visit, and getting too crunchy to even want or need a smart phone.

And... BTW... wouldn't trade my 96 Caddy SLs, or my 98 Signature Town Car for a new Tesla or Lamborghini.

Oops... maybe one regret, but that's too late, now... Never got to used my three other languages... French, German, and Esperanto where they're spoken.

 

[W2R]

So I hung it up February 1st 2017 but continue saving over 40% of my income. How did you switch from a saver to a spender mentality?

Try to think of things or experiences that you really, actually want. It's not helpful to just blow money on junk that will end up in a landfill, or experiences that would bore you to death.

I bought the perfect house for me, not that I needed it but simply because my whole life I had always wanted a house like this one more than anything in the world, and I could afford it. But now what? It's kind of a weird feeling to have everything I ever wanted. Never felt this way before. It is hard to know what comes next.

Traveling is the easiest way to get lots of value for your excess money, but only if you truly want to travel. I don't, so I don't spend my money on it.

Also remember that we are in a huge bull market, that will not last forever. So, this problem may go away on its own for a few years, at some point.

Here's a weird little mental trick you can try, since you have the feeling that you need to justify non-essential purchases to yourself. Keep several months' spending money in cash, in the bank. Then when you are about to buy something and feel that need to justify, tell yourself that the REAL money for this month is in the bank, and that what you are spending is just some "found money" that makes no difference. Hard to explain, but it works for me. Sort of like finding a quarter on the sidewalk.

 

[RobbieB]

For me it was a gradual process. Try to blow more dough every day. I've gotten pretty good at it too although net worth still increasing.

I was plenty frugal while working and the early death of my wife taught me that life sometimes get cut shorter than you planned for.

But you know this as you buried your son and parents are not supposed to bury their children.

I suggest going out to eat and spending at least a hundred bucks on dinner (200 if with a guest)

Have fun!

 

[DrRoy]

So for those of you who manage to do this, how did you do it? What was the overline factor that had you deciding it's okay.

For us it is that we are currently below 1.5% WR. For several years, we have been taking nice trips to national parks or Europe for fun and photography. Those trips were all self directed. For next spring, we just sent out a fat deposit for a professionally led photo workshop to Patagonia. It will cost double what we could do on our own, but I want to see if get much better photo opportunities out of it. We are also likely to start flying some business class on long hauls.

 

[ivinsfan]

My net income is almost 3300 month from DBP + dividends, my savings is 1375 month (supposed to be 1000 for family vactions + 375 for GKS college but the 1st one's on full scholarship and no family vacation this past summer as oldest GS was helping his BF move home from a year abroad and oldest GD was volunteering in Costa Rica). At any rate, it will triple when RMD will be required. I became more of a minimalist after my son died and I needed to borrow money to bury him. Then that switch in my brain never switched off

I really need help figuring out how to switch off that saver mentality. I shouldn't have to justify purchases at the grocery store or clothing. But somehow I just can't break that habit. I really want help on how to do it

So for those of you who manage to do this, how did you do it? What was the overline factor that had you deciding it's okay.

My personal background: I'm single and was homeless for two times out of my life, I buried a son when I was struggling to keep up the mortgage paid leaving me on disability × 7 months, but I'm not there anymore

Pat yourself on the back for what you have accomplished. Let yourself ease into spending money. The family vacation fund is lovely but you've already seen GK have busy lives and busy schedules. Have you though of doing small solo trips one on one with your GK's, that could be really special.

Take a look around your house. Would you enjoy some nice new bedding. A new pair of walking shoes, updating all your pots and pans? Start with small stuff and it will get easier. I'm sorry for your loss.

 

[shortstop14]

Try to think of things or experiences that you really, actually want. It's not helpful to just blow money on junk that will end up in a landfill, or experiences that would bore you to death.

Agree completely. It might be similar to figuring out how to spend your time in retirement, when you've just got more time than you've ever had before. It's surprisingly difficult sometimes to really determine what will bring you true value.

For me, right now, it's travel (an easy way to consume cash) and playing sports. I can see where that could change down the road.

I'm sorry for your loss. I can see where that could affect your thinking.

 

[Closet_Gamer]

It sounds like you've had a pretty rough road. Perhaps direct some income towards charities that help people who find themselves in similar straights.

It will burn down some cash, get you spending, help someone, and there is ample evidence that helping others generates more happiness than marginal consumption.

Just a thought.

 

[OHjosh]

Very glad to read this thread. I am a recovering saver and so I am struggling with spending as well. (I still get too much of a kick paying down my LOC.($14K). Telling myself that I don't want to leave money to funeral directors, charities and heirs doesn't really help me end the upset inside.

I am adding some stuff (shows and coffees out with friends; I just started kiting!). But one thing I am enjoying is making my own meals. (In the old days I came home and scrounged like one of four simple meals that could be made in an hour.) I am now running out of room in refrigerator/freezer! I am not interested in traveling yet, esp. as partner is only 54 and working.

I guess as the posters say, it is a living into thing.

 

[HadEnuff]

So I hung it up February 1st 2017 but continue saving over 40% of my income. How did you switch from a saver to a spender mentality?

If you spent decades saving, don't expect your thought process to change overnight just because you are now retired.

In fact, being a brand new retiree may cause extra anxiety about spending vs. saving simply because you now have no paycheck. Sure, you've crunched the numbers and all of that, BUT, you know that your number crunching required you to make assumptions about the future. No matter how conservative you think those assumptions are, you know they are assumptions, and could be proven wrong.

So, my advice is don't sweat it. Are you denying yourself anything you really want or need? Or is your saving actually buying what you need, which is security in this time of change?

Eventually you will likely become gradually more comfortable with spending.

 

[pb4uski]

So I hung it up February 1st 2017 but continue saving over 40% of my income. How did you switch from a saver to a spender mentality?

I guess that it depends on how you define it. Even though our spending exceeds my pension and our interest and dividends our retirement nestegg continues to grow (120% of when we retired 5 years ago)... so are we savers or spenders? Many of us here have similar stories.

Let's say that you have a 60/40 AA and spend 4%. If equities pay 2% in dividends and fixed income pays 4% then your total income is 2.8% (2%*60% + 4%*40%). But you are spending 4% so you appear to be spending since you withdraw more than your portfolio generates in income.

However, on top of that you have to consider equity appreciation, which adds 3% (5%*60%), which is why your portfolio grows (2.8% income + 3% appreciation> 4% spending) despite spending more than your income... so does that make us a saver?

But to address your question more directly, we spend what we want to for a lifestyle that makes us happy... needs/wants/dreams are never ending but we spend enough that we are happy. In the first few years we were hesitant because we had less income than we were spending but after a few good years and seeing that the sky would not be falling down we are more comfortable.

 

[mystang52]

I wouldn't spend money just for spending's sake. But, if you are not spending money on something you want, or want to do, why not allocate an annual 2% for "fun?" 2% is well below what is deemed a SWR, so in a sense you are still saving yet starting to enjoy the fruits of your LBYM ways.

 

[Hermit]

It sounds like you've had a pretty rough road. Perhaps direct some income towards charities that help people who find themselves in similar straights.

It will burn down some cash, get you spending, help someone, and there is ample evidence that helping others generates more happiness than marginal consumption.

Just a thought.

I plan to use QCDs when the RMD time rolls around. I have a favorite charity and it is a great way for me to transfer some excess funds to that charity.

I am building a house which soaks up a lot of income that would probably go to savings. Between that and the kids (college expenses for one and help on house down payment and wedding for the other) I seem to manage to spend about twice or more my planned and actual living expenses without a problem. In the future I hope to buy a new pickup and I am sure other toys. I thought I would have a problem spending, but it hasn't been the case. My savings are still going up, but not like I thought they would.

Good luck on making the switch.