Why Not Spend More on Me Now than Later?

[Birdie Num Nums]

I've spent the past 30-some years saving more than I've spent, to be able to retire early.

Now, some four years into my own ER, I have gradually convinced myself to loosen my wallet and buy stuff that I wouldn't have otherwise in my early years. (Such as a $100 sub-woofer for my 1970s Sansui 7070 stereo.)

I am learning it's better to spend the $ I've saved on myself now rather than later--when my mind and health may not be able to appreciate what $ I may have remaining then. (Knew a 96-year-old in relatively good health and $ bank book, but mentally "out of it.")

What say you 'bout spending your savings on yourself today rather than during an uncertain tomorrow?

 

[Turboslacker]

I would spend everything I have today if I knew there was no tomorrow...but that is the in-deterministic problem. In lieu of knowing I plan on spending more in the early years of ER while I'm physically and mentally capable. As I slow down I'm sure I will be just as happy enjoying a cheap cup of coffee and watching time go by.

 

[Onward]

The way I look at it, the knowledge that I will be secure in the future is the best thing I can give myself today.

 

[Sarpy]

As long as you feel you have the coverage until you are 'outta here,' I would say go for it. Enjoy it now while you can.

 

[growing_older]

I like the idea of enjoying what I can now, while I'm better able to appreciate it. But I also want to be sure I'll have enough to spend later, when I might need a bit of extra help, but still enjoy life. It's all too fuzzy to me to be really sure when I should loosen the purse-strings and when I should tighten them. If you have a plan that works for you, then by all means enjoy your choices.

 

[Midpack]

I like the idea of enjoying what I can now, while I'm better able to appreciate it. But I also want to be sure I'll have enough to spend later, when I might need a bit of extra help, but still enjoy life. It's all too fuzzy to me to be really sure when I should loosen the purse-strings and when I should tighten them. If you have a plan that works for you, then by all means enjoy your choices.

+1. Answer fits me pretty well too.

Nothing wrong with splurging a little, but I would have just worked longer if I had wanted to spend significantly more in retirement. It's a balance with substantial uncertainty no matter who you are, I am more concerned about having enough at the end than more toys now. And I suspect when the inevitable market corrections are upon us, there will be more frugal posts. I hope to stick to our plan in good times and bad. YMMV

 

[Walt34]

While the idea of "skidding into your casket, worn out, used up and saying 'What a ride!' clutching your last dollar" has appeal, the timing on that is difficult to pull off.

 

[H2ODude]

Sort of in that mode. Retired fully end of 2012 and have been gradually increasing the lifestyle. Still nowhere near what the FIDO calculator says we could be spending, but am becoming much less anal about splurging on larger ticket or even such things as what we buy for meals (sockeye salmon $14.99 a pound....oh well). Good example was recent upgrade in woodworking tools. $8k in a flash; looked like Santa crashed into my garage. In defense, I've built a lot of stuff over the years including 3 sets of kitchen cabinets and almost all our non-upholstered furniture. So I do use the stuff; problem now is do I replace stuff or what?!! Kids are overseas so jewelry boxes is about all I can get to them!

 

[Mulligan]

While the idea of "skidding into your casket, worn out, used up and saying 'What a ride!' clutching your last dollar" has appeal, the timing on that is difficult to pull off.

That would be a great way to go. Unfortunately over the years I have become cranky and conservative.... What happened to me....

 

[GrayHare]

While the idea of "skidding into your casket, worn out, used up and saying 'What a ride!' clutching your last dollar" has appeal, the timing on that is difficult to pull off.

Isn't that what ann*ities accomplish? (for a price)

 

[Ready]

I see nothing wrong with splurging after a life long effort to conserve and put away for your future. For me personally, I find that the older I get, the less desire I have to purchase any material items. They just become stuff I have to take care of, and find a place to put in my house. I can't think of a single material item I have any desire to buy at this point.

Experiences, OTOH, are very enjoyable to me, and I do plan on taking some nice vacations this year. And I never watch how much I spend on groceries, because even if I buy all high end, organic products, it just doesn't end up being that much money. And we hardly ever eat out, so even the most expensive groceries always end up costing a lot less than a few nice meals in restaurants.

 

[walkinwood]

For me, "why not spend more" encompasses a wide range. I'd spend the $100 or $1000 ONCE even if it would exceed my annual budget. It is small enough that it wouldn't jeopardize my long term plan. On the other hand, I wouldn't sign up for a subscription that would put me over the budget or exceed my budget by a large amount.

I tend to spend more freely on experiences or on something that would allow me to have a better experience - say a snow shoes, a new computer.

 

[W2R]

It's your money, Birdie Num Nums, so I think you should do what you want with it!

The way I look at it, the knowledge that I will be secure in the future is the best thing I can give myself today.

+1. This is how I wish to spend my money, as well. I am also spending plenty on myself at the moment, but if I got short on money I would cut back some on present spending to preserve a secure future.

 

[daylatedollarshort]

I like the idea of simple living, saving the planet, using less resources, etc. We are trying to declutter and downsize, and plan to do slow travel using frequent flyer miles for air fare to exotic but low cost of living vacation spots.

I do not think spending more money would make me happier. I like saving money and the life we have planned.

 

[Animorph]

I try to balance my present and future spending. I have a fairly generous budget and I'm happy to spend it all rather than save "extra". Though we pretty much underspend, we just leave the excess in the budget. for later spending.

We sort of have something like the OP going on with one of our cars. It needs the driver's window lift repaired. We get along without the repair by opening the door instead of rolling down the window, at a drive through or parking pay booth. I expect if we really want to sell it for a decent price we'll have to fix the window. We could fix it now, improve the resale price, and enjoy a working window until we sell it. Or we could fix it just before we sell it. So far, we're doing the latter. Probably a little too cheap in this case.

 

[SVHoper]

We sort of have something like the OP going on with one of our cars. It needs the driver's window lift repaired. We get along without the repair by opening the door instead of rolling down the window, at a drive through or parking pay booth... Probably a little too cheap in this case.

Hi Animorph/Birdie,

I recently spent a fair while fixing bits like this on our cars... because I like doing this kind of stuff and hope it models LBYM for my kids.

I think this stage in my life (FI) is about indulgence and happiness but LBYM for life means that I find my indulgence value in lower absolute $ cost stuff. e.g easier to indulge on a relative luxury $20-$200 purchase than a $2000- $20000 one

I still enjoy really optimizing value in some expenditure (recent laptop replacement) but if I can't be bothered, I know I don't have to.

As others have said, this all assumes long term FI with a safety margin. I don't feel a sizable inheritance is good for my kids or that I owe them one... however my conservative planning and spending will hopefully ensure they get one - despite my indulgences!

 

[youbet]

It's all a crap shoot we won't know we've won or lost until it's over. Anyone that thinks they know how it will all end financially is kidding himself.

Having said that, I recognize the difference between allowing yourself to enjoy an activity you really, really crave vs going out and looking for something to spend money on. If I wanted to do something very much and that activity, say some special trip, would be above and beyond our normal planned budget, I'd look at it like this:

If it was a large expenditure and I would have to dip into our FIRE portfolio reducing our FireCalc portfolio survival probability from 100% to 99% but doing this activity would be a wonderful, likely life changing experience, I'd do it. The odds of running out of money are still very small. My life's enjoyment has increased greatly both during the activity and with memories I'll take to the grave. A large reward is worth a small risk.

OTOH, I have no desire to go out and look for something to spend money on just to reduce the odds of croaking with megabux still in the pot which is my most likely outcome.

Everyone has to do their own evaluation of the trade-offs. A tiny reduction in portfolio survivability vs a life changing, memory creating, wonderful experience? A reduction in portfolio survivability vs a new boat? Etc.

There's another thread running about doing things while you can at age appropriate times running concurrently with this one and I think there are many common issues.

 

[Hermit]

Sort of in that mode. Retired fully end of 2012 and have been gradually increasing the lifestyle. Still nowhere near what the FIDO calculator says we could be spending, but am becoming much less anal about splurging on larger ticket or even such things as what we buy for meals (sockeye salmon $14.99 a pound....oh well). Good example was recent upgrade in woodworking tools. $8k in a flash; looked like Santa crashed into my garage. In defense, I've built a lot of stuff over the years including 3 sets of kitchen cabinets and almost all our non-upholstered furniture. So I do use the stuff; problem now is do I replace stuff or what?!! Kids are overseas so jewelry boxes is about all I can get to them!

Gee... That's not splurging. That's Essential!

 

[gauss]

Hi Animorph/Birdie,

I recently spent a fair while fixing bits like this on our cars... because I like doing this kind of stuff and hope it models LBYM for my kids.

I think this stage in my life (FI) is about indulgence and happiness but LBYM for life means that I find my indulgence value in lower absolute $ cost stuff. e.g easier to indulge on a relative luxury $20-$200 purchase than a $2000- $20000 one

I still enjoy really optimizing value in some expenditure (recent laptop replacement) but if I can't be bothered, I know I don't have to.

As others have said, this all assumes long term FI with a safety margin. I don't feel a sizable inheritance is good for my kids or that I owe them one... however my conservative planning and spending will hopefully ensure they get one - despite my indulgences!

+1

One concern of mine is a fear that if I start to spend freely now, I may develop a taste for the "high life" that many in America fall victim too throughout their life. Madison Avenue can be very influential.

I spent my whole working life developing LBYM / value proposition types of habits that I hope will easily get me through the next 50 years.


-gauss

 

[Chuckanut]

I have gradually convinced myself to loosen my wallet and buy stuff that I wouldn't have otherwise in my early years. (Such as a $100 sub-woofer for my 1970s Sansui 7070 stereo.)

If spending $100 to buy a sub-woofer for a 1970's stereo is your idea loose spending, then I doubt if you will succumb to a profligate lifestyle. Now, spending thousands of dollars on a VPI turn table is a different story.

Enjoy your sound system. All to many of the modern systems are just compressed mp3's playing on tinny speakers.

 

[Chuckanut]

For me personally, I find that the older I get, the less desire I have to purchase any material items. <snip>
Experiences, OTOH, are very enjoyable to me, and I do plan on taking some nice vacations this year.

Agreed! While I certainly have my collection of 'toys' most of them provide some useful function such as the 5 year old laptop that I am writing this message on. I would be a poorer man if I never participated in this forum.

OTOH, given the choice between having a late model Lexus or BMW in the driveway or a few weeks in Europe, I'll go for Europe. Or some NP's I haven't seen yet. I find the payback on experiences goes on for years and years, while most 'things' wear out, become obsolete or just get boring.

 

[Shawn]

Even though I am very frugal, I already spend enough on myself today to make me happy. With a few exceptions, there is nothing more I wish to buy. If I want something, I get it. While I seek value, cost is not a significant issue.

Most of the activities I enjoy cost very little. I do not believe this will significantly change in the future. Nor do I believe this would change even if my net worth increased 1000 times. I have no desire to eat at a fancy restaurant or drive a big car.

I am still working. What I do not spend on today is time. I do not have time to read the literary classics. I do not have time to take a history class at the local community college. I do not have time to fix the bathroom sink (or wait around for the plumber to do it for me). I do not have time to go on a multi-week backpacking trip or ride my bicycle across the country. Nor do I have time to do nothing all day.

Yes, there are a few high-cost adventure items that I would like to pursue in retirement. But for the most part, I do not pursue them today due to a lack of time, not due to an unwillingness to spend money.

I agree with others in that money provides a sense of security, and this is priceless. So in a way, I am already "buying" one of the most important things to me with the money I have.

 

[Balance]

Interesting thread.

I was thinking about this the other day and my thoughts were similar to all of you who posted especially Ready and Youbet. I view that we have 3 desires in life, NEEDS, WANTS and DREAMS. Needs are just that, Insurance, Housing, Food etc. Wants are things that we really feel make our everyday life enjoyable. These are different for each of us, but I can tell you one of those for me is fishing. Dreams are those things that you want to do but you know it's going to stretch you or you are going to have to make a trade off to achieve (like working a part time job).

One idea I had was to create sort of a line of credit or Cash bucket (I am the one funding it from my assets) and then living off the cash flow generated by the remainder of the assets and other sources of income. The cash flow would cover the Needs and Wants. The line or cash bucket would fund the capex expenses like a new roof, HVAC, new car and the dreams. If during the course my wife and I find that our investments or possibly part time jobs replenish the line ahead of a long term trend then we could splurge as we go. If things get tight with the investments or we get hit with a large capital NEEDS expenditure earlier than planned we can pull back a little. I guess what I am saying is I would be willing to spend down the line a little ahead of projections to enjoy things like a Galapagos Island trip which requires us to be in good physical condition and then replenish the line later with a part time job, downscale a future capex Need or trade off a future dream. Not sure if I am making sense as I am still working this out in my mind. I just know from experience (I live in an area where there is a large disproportionate amount of retirees) that most of us will not be very active and limited in what we can enjoy after we reach 75 yrs old, assuming we make it that far. Sorry, if I offended any 75+ yr olds, but if I did then it's because you are one of the few that has beaten the odds by being in great physical and mental health. So, congratulations!

 

[robnplunder]

Without risking your future retirement, I say spend it while you can get the most out of spending it. If you can't, I will help spend it for you.

 

[Koolau]

An interesting subject which in some fashion or other is covered frequently here - and that's a GOOD thing! What could be more basic? How DO we balance "living now" with never running out of money?

The first symptom I noticed that this was a difficult balance to achieve: FIREing at 58, I assumed a 30 year life span (reasonable - no parent or grand parent on either side made it quite that far.) Now, heh, heh, at 67, heh, heh, the plan is for a 30 year retirement. Maybe that's not so bad since, supposedly, if a couple reaches 65 (2 years ago) ONE of them stands a 25% chance of reaching 95.

Next symptom is that, even though we spend much more now than when w*rking, we still haven't actually approached our theoretically "allowable 4%" WDR. What's wrong with this picture? Actually, nothing. That IS our plan.

So, I guess I come down on the "not running out of money" end of the spectrum rather than the "leaving money on the table" end. Honestly, we have "handled" the "leaving money" end of the spectrum. We KNOW where the left-overs will go and it's the same places it would go NOW if we were not concerned about running out of money. A good place to be IMHO.

So, we do still occasionally agonize about whether we should spend for something, but, for the most part, we just follow the "plan". It's very comforting. It's not for everyone, so YMMV.