Help me get over spending anxiety

[RenoJay]

This post will certainly sound like "Oh poor baby, first world problems" to many, but I figure this is the forum where this kind of stuff is ok. Like most here, I live well below my means. In the past two weeks, I've watched my paper worth decline by mid six figures. Recently, I got rid of an emotionally-abusive client even though I was likely to earn six figures in relatively short order from him. (Yeah, he was THAT bad.)

There are a lot of purchases I've been wanting including a new kitchen (roughly $30k all in), a midlife crisis sports car (another $30k or so), a Disney cruise with the kiddos (maybe $10k all in.) Obviously that stuff adds up, and can lead to some shocking monthly credit card bills and that's what's inhibited me thus far. But logically, I had no issue with the stock market correction (which very well could be ongoing an nowhere near bottom) nor with extricating the valuable client. And I can see from my spreadsheet that the big ticket purchases will make no difference in my ability to be FI. (I haven't quite done the RE step yet, but am getting there by default by getting rid of bad clients.)

So why am I having such a hard time pulling the trigger on some big purchases?

 

[MarieIG]

Why don't you set up a splurge bucket/ fun money (account). When you take some extra cash off the top, put it in the splurge bucket. Then when you want to spend, you won't feel as if you are tapping your retirement funds, and it may be easier.

Also, you don't have to buy all your goodies all at once.

 

[Joylush]

This post will certainly sound like "Oh poor baby, first world problems" to many, but I figure this is the forum where this kind of stuff is ok. Like most here, I live well below my means. In the past two weeks, I've watched my paper worth decline by mid six figures. Recently, I got rid of an emotionally-abusive client even though I was likely to earn six figures in relatively short order from him. (Yeah, he was THAT bad.)

There are a lot of purchases I've been wanting including a new kitchen (roughly $30k all in), a midlife crisis sports car (another $30k or so), a Disney cruise with the kiddos (maybe $10k all in.) Obviously that stuff adds up, and can lead to some shocking monthly credit card bills and that's what's inhibited me thus far. But logically, I had no issue with the stock market correction (which very well could be ongoing an nowhere near bottom) nor with extricating the valuable client. And I can see from my spreadsheet that the big ticket purchases will make no difference in my ability to be FI. (I haven't quite done the RE step yet, but am getting there by default by getting rid of bad clients.)

So why am I having such a hard time pulling the trigger on some big purchases?

I've always been that way. You're just conservative or you wouldn't be where you are today. Spending on wants goes against your nature.

Reminds me of a frivolous purchase I made when I turned 50. I just really liked the then newly released Ford Boss Mustang in orange. So much against my practical nature. I've always owned four cylinder, four door hatchbacks and kept them for years and years. This was the opposite of everything I believed was smart in a car. But I loved the color and other family members convinced me to go against my nature and splurge on myself.
I kept it for a year. Traded it in with less than 700 miles on it. Sure it was cool but it's just not my nature. I got a Ford Transit (small, four cylinder four door hatchback/van and a Ford Focus (small four cylinder, four door hatchback) and didn't take too much of a loss on it. I got a vehicle that was more me and my daughter got a nice college graduation gift.

Challenge yourself to spend outside your comfort zone if you can afford to. Just don't be surprised if it doesn't bring you the satisfaction you expected.

 

[kcowan]

The thing about anxiety is that it diminishes when you start acting against it. So start making plans and stop overthinking it.

 

[IMATERP]

why don't you set up a splurge bucket/ fun money (account). When you take some extra cash off the top, put it in the splurge bucket. Then when you want to spend, you won't feel as if you are tapping your retirement funds, and it may be easier.

Also, you don't have to buy all your goodies all at once.

+1

i

 

[lhamo]

If you have a large enough net worth that this recent correction put you down by mid six figures you are either:

1) Spectacularly wealthy, or
2) Investing in things that are too volatile/risky

Or maybe a combination of both of those things.

At your level of wealth, why not just take some cards off the table? Cash out some losing investments so you can claim the tax loss and put that money in a "fun bucket" to spend on the things you mentioned. Adjust your allocations to a more conservative split. If you are going to keep working/saving, split the amount you save into some for the future and some for current fun.

You've already won the FI game. Time to start enjoying it a bit!

 

[Red Badger]

Why don't you set up a splurge bucket/ fun money (account). When you take some extra cash off the top, put it in the splurge bucket. Then when you want to spend, you won't feel as if you are tapping your retirement funds, and it may be easier.

Also, you don't have to buy all your goodies all at once.

That's what I did in 2017. As the equities rose, I periodically skimmed some "cream" off the top (some for a kitchen redo & some for a trip to Europe). Only took a minor percentage each time, so 2017 nest egg saw considerable YOY growth (in spite of stealing a few egg along the way). Converted fun money to a couple of CD's that will mature when we want to spend the monies.

This approach was a way to leave our growing nest egg still growing, yet have some fun along the way. YMMV!

 

[bobandsherry]

If it helps, with exception of the cruise, those spends are not a total expense. Kitchen will add value, so maybe think of it as investment that takes a quick loss. Same with car. Years down the road (no pun intended) both will still be worth something. As long as you have enough buffer in your available funds, do what makes you feel good. BTW, you should plan for travel in your spend. Set money aside for larger trips so you can build up the funds.

 

[JoeWras]

You need to visit the "Blow that Dough" thread. Maybe read more of RobbieB's posts.

You'll have no problem spending.

 

[audreyh1]

This post will certainly sound like "Oh poor baby, first world problems" to many, but I figure this is the forum where this kind of stuff is ok. Like most here, I live well below my means. In the past two weeks, I've watched my paper worth decline by mid six figures. Recently, I got rid of an emotionally-abusive client even though I was likely to earn six figures in relatively short order from him. (Yeah, he was THAT bad.)

There are a lot of purchases I've been wanting including a new kitchen (roughly $30k all in), a midlife crisis sports car (another $30k or so), a Disney cruise with the kiddos (maybe $10k all in.) Obviously that stuff adds up, and can lead to some shocking monthly credit card bills and that's what's inhibited me thus far. But logically, I had no issue with the stock market correction (which very well could be ongoing an nowhere near bottom) nor with extricating the valuable client. And I can see from my spreadsheet that the big ticket purchases will make no difference in my ability to be FI. (I haven't quite done the RE step yet, but am getting there by default by getting rid of bad clients.)

So why am I having such a hard time pulling the trigger on some big purchases?

I think if I were still working I’d have to set aside funds in a splurge account separate from my long term investments before I’d feel OK about spending it.

 

[Bamaman]

Just hang in there. Every thing will be all right.

You have plenty of time in the future to make some frivolous (and sometimes foolish) purchases.

I can say that because I have a Jaguar convertible sitting I my driveway that is seldom driven.

 

[flintnational]

Asking a bunch of LBYM'ers how to spend money is kind of like asking;

-a teetotaler what wine to order with dinner
-a nun for advice on sex
-Kim Kardashian how to be modest

Good luck

 

[athena53]

I retired in May, 2014 and have a morbid fear of poverty in old age (I just turned 65 and don't feel old yet). I focus on the withdrawal rate and right now my average annual rate is below 4% and was only 3% last year despite the internal rate of return on the portfolio being 17%. I know I'm down by something between $100-$200K from the peak and so far I'm not panicking.

I keep myself calm by reminding myself that my withdrawal rate is less than the long-term rate of return on the portfolio (the latter is 7% annually from 1/1/2011 to 1/1/2018) and that a massive % of my expenses are travel and charitable deductions, both of which could be cut back if I had to. Beyond that, I spend what I withdraw on whatever the heck I want.

 

[MRG]

Time helped me. Almost 5 years later and we're still ahead of when I left Megacorp.

 

[Bir48die]

I did that remodel and the car thing the couple of years before I retired and now I'm just plain boring

 

[athena53]

Time helped me. Almost 5 years later and we're still ahead of when I left Megacorp.

Yes, that's happened to me, too. I was up 16% over where I was at retirement before the crash- so likely still up significantly. I think it does take time no matter how much you have, to see if things are really working out the way you hoped. If anything, I'm a little more relaxed about my prospects now, especially since becoming Medicare-eligible has brought more certainty to my healthcare costs.

 

[Meadbh]

If this correction had happened immediately after I retired, I would be reining in the purse strings. However, I have been ER for over 5 years now, and NW has increased by 21% despite a WR of ~3% and no private pension. In other words, the sequence of returns has been in my favour so far. The further I get from my ER date, the more confidence I have that my portfolio (and other investments) will sustain me through the ups and downs, especially as I get closer to CPP and a positive rental income. I also have a cash buffer. I have been loosening the purse strings somewhat of late but I’m not worried.

 

[Walt34]

Yup, RobbieB has been a [-]bad influence[/-] inspiration to many of the "too LBYM" types here. Even me, from time to time.

You need to visit the "Blow that Dough" thread. Maybe read more of RobbieB's posts.

You'll have no problem spending.

 

[45th Birthday]

I don't get all the angst about the recent small blip in the markets. We are about where we were in November (bonds maybe a little worse). Given the need for some kind of correction, and the prospects for near term future earnings, IMHO the equity market now is a more interesting place to be than it was then.

I think the tendency for many to extrapolate recent moves in the market puts the heartburn of fear front and center. When it was at the same level in November but headed up, people were positive. Now, at the same level, but after a big move down, people are fearful. When in fact, tax reform, earnings, and the economic outlook mean now is a better time to expect future price appreciation than it should have been then. I say if this type of thinking creeps into your decision-making, then stop paying such close attention to short-term moves and take confidence from the soundness (or not) of your long-term plan.

 

[misshathaway]

Time helped me. Almost 5 years later and we're still ahead of when I left Megacorp.

+1 although after 2.5 years I have not progressed much in the spending yet beyond sometimes not buying the store brand at the grocery store. Trouble is, even my indulgences can be had for < $500 and free shipping.

 

[traineeinvestor]

I make an accrual in my spreadsheet each month for "luxuries" and tell myself that I can spend that money without feeling guilty.

Problem is, there are very few things that I actually want all that much - I last dipped into the fund to buy myself a new lens for my camera to celebrate FIREing. Fast forward to today and I now have enough money set aside to buy a completely unnecessary car.

 

[6miths]

I thought the thread was going to be to help you get 'over spending' anxiety not to 'get over' spending anxiety!! Afraid I am not going to be of much help. Though I would say the cruise is high priority then the kitchen perhaps, the other not so much!

 

[kcowan]

Spend on experiences. Save on things.

Things depreciate. Experiences last forever.

 

[Music Lover]

Spend on experiences. Save on things.

Things depreciate. Experiences last forever.

I guess it depends on one's perspective.

A vacation is often considered to be an experience, but for some people buying a nice sports car or a quality musical instrument can also provide pleasurable experiences that last forever.

 

[Mdlerth]

the Rx for LBYM is to partition the M

I'm with the ones who advise you to compartmentalize some assets. Park some resources in a separate account for discretionary spending. Don't just perform a mental exercise; genuinely move some money into a different place in some readily liquid form. Then let it sit there for a while.

You don't have to blow it all the first day. The longer it sits there the less post-partum stress will accompany its depletion.

Eventually your mind will grow used to the idea of that separate account being unrelated to your nest egg, and you'll find it easier to accept putting it to some self-indulgent pursuits.

Good luck, and congrats on achieving a level of means which can accommodate a boost in luxuries.