Switching from saving to spending, how did you do it?

[Kings over Queens]

A couple years ago we went out to lunch, stopped into a Mercedes dealer just for fun, took a test drive. Then went to a bank, got a check and bought a Benz sedan.

April 2016, I'm driving an S420 with 190k miles, a cracked windshield and squeaky brakes because I refused to pay for OEM rotors and pads. My wife finally has enough of me, literally flicks me in the forehead and says "you're an executive, go buy an effing car!"

So I start looking at E class, and she can see I'm not comfortable, and I can see the scowl our of the corner of her eye as I pretend.

We agree to test drive an S 550, but because of how it was wedged in between cars, I had to wiggle in and the second I sat in it, she saw the look on my face and told the dealer "he'll take it."

I hemmed and hawed and wringed my hands until she did it again. Flick, right in the forehead, "you're going to keep this car for 10 year, just buy what you want." So I did, however, I found a a 3 year old CPO off lease and that helped my angst.

As it turns out, just last week I sold that car with 160,000 miles to someone else.

 

[doneat54]

April 2016, I'm driving an S420 with 190k miles, a cracked windshield and squeaky brakes because I refused to pay for OEM rotors and pads. My wife finally has enough of me, literally flicks me in the forehead and says "you're an executive, go buy an effing car!"

So I start looking at E class, and she can see I'm not comfortable, and I can see the scowl our of the corner of her eye as I pretend.

We agree to test drive an S 550, but because of how it was wedged in between cars, I had to wiggle in and the second I sat in it, she saw the look on my face and told the dealer "he'll take it."

I hemmed and hawed and wringed my hands until she did it again. Flick, right in the forehead, "you're going to keep this car for 10 year, just buy what you want." So I did, however, I found a a 3 year old CPO off lease and that helped my angst.

As it turns out, just last week I sold that car with 160,000 miles to someone else.

We bought a <2 year old C300 with 11k miles on it. Been very happy with it.

 

[TickTock]

I don't feel the need to give myself a paycheck. Instead, I just replenish the spending account when it gets low. Often done when I rebalance to my fixed, overall asset allocation targets.

We do a monthly transfer from the MMF to checking, based on how much was spent the previous month. Monthly spending can vary quite a bit, so we don't worry about a fixed paycheck amount. I look at the average monthly spend at the end of the year and compare to the estimate made at the start of the year.

 

[razztazz]

If everything goes as planned, I will enter retirement in a couple of months. As we are planning our activities after my retirement, I found that I am very hesitant to spend any $. Even minor spending such as a California Zephyr trip or a decent bottle of wine are giving me headaches.

By researching on the internet, I found this is a common situation for new retirees. Would love to hear about your experiences. Is there one major factor/trigger that enabled you to do the switch ?

Sorry, I never really learned how to spend and enjoy it. I spend on what I need certainly, and don't feel guilty about buying optional tchotchkes (most of the time anyway). The only part I enjoy is knowing I have the money and don't have to worry about spending it when I have to.

 

[kgtest]

Just keep telling yourself “If you don’t spend your money, someone else will.”

As I get older, this phrase gains more meaning, and has helped me to loosen up on spending.

Keep telling DF this! He has been retired almost 11 years now and at 73, PLENTY he could be spending down with likely 10 good ones ahead of him. Mom is on O2 with COPD as a lifelong smoker, so travel with spouse is off the list of retirement activities. Buy a sports car or beach house also doesn't seem to be in their cards...so I guess I am inheriting millions? Can't even convince pops to pay the dinner bill.

 

[Diogenes]

The book "Die with Zero" actually is about an accumulative life.
Accumulating experiences and memories. Reaping the joy of helping others, while still living.

I don't think your book about trying to die with the most money will resonate with very many folks.

Perhaps. I find that "accumulation of experiences", for all of its occasionally manifest joys, is not archival. I've had the privilege of seeing several marquee museums, in various parts of the world. Yes, I remember... even took pictures. No, they're not cherished memories. Good to have, yes. Crucial, let alone irreplaceable? No. If there were an option, to claw-back the money spent on such travel, at the cost of erasing the memories of having traveled... I'd chose the money-option, without the least doubt or regret, or feeling of a philistine's misapprehension of what's valuable in life.

 

[iloveyoga]

Keep telling DF this! He has been retired almost 11 years now and at 73, PLENTY he could be spending down with likely 10 good ones ahead of him. Mom is on O2 with COPD as a lifelong smoker, so travel with spouse is off the list of retirement activities. Buy a sports car or beach house also doesn't seem to be in their cards...so I guess I am inheriting millions? Can't even convince pops to pay the dinner bill.

My Mom never, ever pays for anyone's meal. Sometimes we pay for hers .

 

[sengsational]

Perhaps. I find that "accumulation of experiences", for all of its occasionally manifest joys, is not archival.

Excellent point. This indicates to me that not all experiences are equal. I guess that's stating the obvious, but it seemed more profound when I first thought it, LOL! I'm like you with a lot of the travel destinations. You "experience" a world heritage site? Or are you trying to impress yourself or someone else? I'm sure some people are in awe at being in a cathedral, and it impacts them deeply. Not me. I'm thinking about how to get back to the hotel and where to go for dinner.

It's a little easier having meaningful experiences with people, like family or close friends. You can run a test on meaningful experiences by trying to imagine that you're only going to be around for, say, one year longer. Would you go tour yet another church? Nope. Would you go tour yet another church if that's what would get your wife and kids together? I think so.

 

[Gumby]

5 minutes..... Optimistic aren't you.

I assume they'll need a few minutes to push me to the side of the road so I don't block traffic.

 

[pb4uski]

Just keep telling yourself “If you don’t spend your money, someone else will.”

As I get older, this phrase gains more meaning, and has helped me to loosen up on spending.

I told my frugal friend that just last week. No siblings and no cousins in the US. He has a 20 year old truck that he keeps repairing and I keep trying to convince him to spend some of his stash for a new truck. He knows he should but just can't pull the trigger.

Worse, he doesn't have any beneficiary designations (I help him with his investing). I keep telling him if he doesn't do something then it will end up with someone in his bloodline that he hasn't even met.

 

[jollystomper]

Is there one major factor/trigger that enabled you to do the switch ?

It helps that after almost seven years of retirement, and spending as we desired, we have more than what retired with. Even at the worst of the pandemic (from a market/financial perspective), which was almost 2 years after we retired, the dip still left us with about the same as what we had when I retired. All the models showed we were 100% good for what we wanted to spend, and we are still better off. So it has become is easier to increase our spend, especially on experiences. For example, last year our big spend was paying for all of our kids and their families to attend a family reunion with my siblings and their families. That was priceless.

 

[Romer]

Throughout my career Savings was out of site out of mind. I had $$ taken out of each check that went to my 401K, Savings account and checking. Checking is where we spent money. I didnt consider the other money except for big purchases.

When I retired the automatic savings stopped of course.

I tracked spending the last 4 years of work. I laid out a plan spending exactly the same or up to $20K more and they both worked using Firecalc and my own spreadsheets

We essentially live in the same manner we did before retirement except spend more on travel and less on lunches and gas

I looked at where we are spending money and looked to see if there were smart things I could do long term. I installed Solar with batteries before I retired and two HVAC systems with Heat pumps since. I havent had to pay for Electricity in over 3 years expect the $5 connect fee to the grid so I could do Net Metering. The heat Pumps brought usage down now that I bought an EV for my wife (I still have gas vehicles) and it is still covered by Solar. I know this was a huge expense up front others would frown on. For me it helped lock in electricity costs so they would not be impacted by rate changes. Plus having power when the lights in the neighborhood go out makes my better half happy.

I looked at other expenses. I was paying $10 for each cable box in my house for 5 boxes. I got rid of 4 and bought Fire sticks that give me the same functionality with the Xfinity app and the other streamings apps. We also got rid of our Land line. Those two save us $80 a month or almost $1000 a year without any loss of capability. Since we each have a cell phone we still have two phones

I was paying $200 a month for cell services. Now we pay $70 a month for the same service using the same network through another provider. Still have the same International capability. That is $840 a month

I have a yearly expense plan at a certain $$ number, I also have a high bar of a larger $$$ number that we can spend every year and still be fine with margin. As long as we aeverage between the two numbers we will be fine. Some years may actually be higher when you buy a car or other, other years will make up for it

I still track my spending every year and have the next 4 years laid out with last years expenses. I update as we go along

The point of the above is to get comfortable with your spending. If you have reveiwed what you are doing and have limits set above what you expect to spend, then you can manage your spending with confidence. Since you are ready to retire, I would assume you have already figured out how much you can spend a year now just extrapolate that to actual expenses and make sure you are getting the best value for your dollars

 

[RetiredHappy]

Excellent point. This indicates to me that not all experiences are equal. I guess that's stating the obvious, but it seemed more profound when I first thought it, LOL! I'm like you with a lot of the travel destinations. You "experience" a world heritage site? Or are you trying to impress yourself or someone else? I'm sure some people are in awe at being in a cathedral, and it impacts them deeply. Not me. I'm thinking about how to get back to the hotel and where to go for dinner.

It's a little easier having meaningful experiences with people, like family or close friends. You can run a test on meaningful experiences by trying to imagine that you're only going to be around for, say, one year longer. Would you go tour yet another church? Nope. Would you go tour yet another church if that's what would get your wife and kids together? I think so.

We did alot of cruises in the Mediterranean and with the cruises, we did alot of shore excursions. We absorbed and learned so much about the history at each location. Do I remember all of them? No. But I always had a great time. I was in Singapore recently, and my local friend pointed out a Moorish architecture through the window while we were waiting for the elevator. My friend is also very well travelled, and my response was something like Spain has quite a bit of such architecture. His response was yes, in southern Spain. I was digging into my brain by then as to where we saw and then I remembered quickly, and I said Alhambra. He said yes. We were not trying to impress each other, but it's nice when we could have a conversation at the same level.

I am telling this story because travel expands our minds. Expensive, yes, but money is not wasted.

 

[sengsational]

Yes, it is nice to have those kinds of connections with people.

That got me thinking about travel experiences that I remember the most. Usually when my wife and I reminisce about travel, it's about the interesting people we met. Often it's about the people who had the best sense of humor. That seems to bubble up frequently. Those times are memorable, but a close second are the catastrophe avoided (or experienced, but survived).

Like you, we learn a lot while traveling and after we get back, we do a lot more digging. Neither one of us gets too involved before the trip in the details, but once exposed, it kindles an interest, and we then have a joint interest to explore.

 

[Taco]

Perhaps. I find that "accumulation of experiences", for all of its occasionally manifest joys, is not archival.

I’m not into museums or touristy sites either. Being outside in beautiful places with people I love is what floats my boat.

I get that what floats your’s is different. And that’s cool.

My point wasn’t that you’re wrong, but that one can accumulate more in life than just money.
And also that your goal of relentlessly growing your wealth is not typical - so that book of yours will be a flop.

Your goals are also pretty much opposite of what this entire forum is about. People who want to continually grow their assets are not likely to retire early, often when they are at their peak earnings.

 

[Chuckanut]

Today, our spending is much closer to FIRECalc's 95%. But I still can't spend $6K on a first-class ticket to Europe. It's just a 10-hour flight... I can survive coach, pocket $5K, and use it for another trip later. That's just how my brain works.

FWIW, I would spend about half of the $5K savings on nicer and better located hotel rooms. 10 hours in the plane vs at least 80 a week in the hotel room. A comfortable, quiet, well located hotel room with a good breakfast is worth a lot. YMMV.

 

[skyking1]

FWIW, I would spend about half of the $5K savings on nicer and better located hotel rooms. 10 hours in the plane vs at least 80 a week in the hotel room. A comfortable, quiet, well located hotel room with a good breakfast is worth a lot. YMMV.

I am happier with making that spend with a solid recommendation. This is one of the benefits of this place.

 

[Out-to-Lunch]

If there were an option, to claw-back the money spent on such travel, at the cost of erasing the memories of having traveled... I'd chose the money-option, without the least doubt or regret, or feeling of a philistine's misapprehension of what's valuable in life.

I, of course, do not know you more than that which you have chosen to reveal to us. But that statement shocked me.

 

[Diogenes]

Your goals are also pretty much opposite of what this entire forum is about. People who want to continually grow their assets are not likely to retire early, often when they are at their peak earnings.

Not necessarily. My labor-earnings peaked, in inflation-adjusted terms, at around age 40. It was slightly downhill thereafter... then sharply downhill. The portfolio has meanwhile done OK. Nothing spectacular, but OK. If one front-loads lifetime earnings/savings, it is entirely possible to arrive at a very early FIRE-age, with an enormous ratio of accumulated capital to remaining human capital. Put simply, at my current or foreseeable earnings-power, one big day in the stock market might be comparable to a decade of current gross W2. So, whether somebody retires at 55 or 65, quite literally depends on how the market reacts to the afternoon news.

The positive spin, is that even a parsimonious and greedy person can accord himself license to retire early. The negative spin, is that we become thralls of the market and the economy... there is precious little that we can do, as earners and workers and savers, to materially affect our good (or bad) fortune.

Another factor is that for some of us, FIRE isn't voluntary. The difference between retirement and unemployment, is that the "retiree" has more money. Imagine somebody at or near peak annual earnings, who gets downsized and can't get re-employed. Instead of becoming a Wal-Mart greeter, this person might just say "[expletive]-it, I'm done sending resumes and begging for interviews. I'm just going to call it a career, and become a full-time novelist instead". Maybe there's a scandal in the office, and the VP of Finance takes the fall. Who will then employ this ex-VP? Our hero goes from $600K/year to... Wal-Mart greeter? Um, no... not if he or she has plenty of millions at Vanguard already.

But it's quite a different thing, to cease working vs. ceasing being frugal. That 4% SWR can be a large sum, if the portfolio is large. Can we justify spending 4% or 3.3% or whatnot? Maybe not. Maybe the aim is to let the portfolio grow, spending only 0.4%.

 

[sengsational]

I know I get a charge out of being frugal, but I consider it a curse.

 

[pb4uski]

Frugality is both a blessing and a curse... I still occasionally frustrate myself with reluctance to spend even though intellectually I know we can afford it. On the other hand, sometimes it comes freely. We tend to open the spending spigot more easily while we are on vacation.

Fruglity is like many other things in life... in moderation is great, in excess not so great.

 

[athena53]

If there were an option, to claw-back the money spent on such travel, at the cost of erasing the memories of having traveled... I'd chose the money-option, without the least doubt or regret, or feeling of a philistine's misapprehension of what's valuable in life.

We're all different. I'm one of 5 siblings and the rest aren't really into traveling at all. One brother AFAIK has been only to Canada and my sister and her husband love the Caribbean but did only one transatlantic- guided tour to Ireland- and called it good. I have no idea what I've spent over the years on travel but it would be a mind-boggling sum (and I'm not done yet) but it wasn't at the expense of my future security.

As others have mentioned, it's not about the landmark "bucket list" places. I've been to Paris 3X, never went up in the Eiffel Tower and my late husband and I found the Louvre and the d'Orsay chaotic. We found a lovely smaller museum with an exhibit of Slovenian impressionists and it was wonderful. I tend to go out and wander- watching the people, looking in shop windows, seeing what's popular at the grocery stores. My best stories aren't about the "must-see" spots but the random encounters and discoveries.

And if everyone traveled the way I did, the popular spots would be even more crowded.

 

[audreyh1]

Excellent point. This indicates to me that not all experiences are equal. I guess that's stating the obvious, but it seemed more profound when I first thought it, LOL! I'm like you with a lot of the travel destinations. You "experience" a world heritage site? Or are you trying to impress yourself or someone else? I'm sure some people are in awe at being in a cathedral, and it impacts them deeply. Not me. I'm thinking about how to get back to the hotel and where to go for dinner.

It's a little easier having meaningful experiences with people, like family or close friends. You can run a test on meaningful experiences by trying to imagine that you're only going to be around for, say, one year longer. Would you go tour yet another church? Nope. Would you go tour yet another church if that's what would get your wife and kids together? I think so.

Of course experiences aren’t equal. If you aren’t doing traveling that’s important to you (or close ones) then something is wrong.

I definitely enjoy the experiences and the memories. DH doesn’t seem to retain much memory-wise from our travels but mine are very clear and detailed and easily recalled. I enjoy reliving them. I’m driven by a strong interest in history so there is a lot that interests me when traveling. I’ve usually done a lot of reading in advance of travel that gives me a deep background when I visit a location and I enjoy that aspect very much. These days I’ve been immersed in Ancient Greece and surrounds for Bronze Age/early Iron Age. Just fascinating stuff.

 

[audreyh1]

Perhaps. I find that "accumulation of experiences", for all of its occasionally manifest joys, is not archival. I've had the privilege of seeing several marquee museums, in various parts of the world. Yes, I remember... even took pictures. No, they're not cherished memories. Good to have, yes. Crucial, let alone irreplaceable? No. If there were an option, to claw-back the money spent on such travel, at the cost of erasing the memories of having traveled... I'd chose the money-option, without the least doubt or regret, or feeling of a philistine's misapprehension of what's valuable in life.

As usual I can’t relate to your posted points of view at all. We are complete opposites. Our travel is not driven by what other people proclaim as must-sees. There are always strong ties of personal interest to destinations plus even just being out there traveling somewhere is a delightful adventure in itself.

 

[Time2]

Switching from saving to spending, how did you do it?​

Not very well, I'm expecting to have more when I die than we have now. It seems very possible unless one of us ends up with expensive medical bills. We spend under $70k and start SS in April at $58,500 a year. The other thing that could prevent us from growing our nest egg is gifting. We have already gifted about $500k to our kids. First World Problems.