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

[deserat]

It took me years, but I am there now. Also, our monthly pension/SS income exceeds our regular bills now, so that helps. One thing that continues to help me....watching my 84 year old mother literally not be able to spend her assets. I can do it with mine now, while we are able to move and go and want to do some stuff.

This ^^^ - am now helping my father and his wife - both in their 80s....he looks at me and says he doesn't know what to spend it on...and realistically they won't. They live comfortably but do not in any way spend what they bring in with the pension and SS...so, we shall see. I imagine it would go quickly if we needed in home care....and that is what I tell them. Nevertheless, I am 23-20 years younger and can see how I might end up like them, so I am indulging a bit now...I will have as much or more than they have in pension/SS streams of income at age 70. I have also lived my life such that I have had many of the experiences I wanted while a bit younger. I am merely catching up on some more obscure ones now....so, LSS, I fully understand/empathize/sympathize....

 

[LARS]

Will be thirty years without a paycheck this May. Never not done, or spent, what I want, within reason, over that period. Spent money on wine, women and song and the rest I wasted, but I digress. ;-)

Still, no question DW and I will die with way too large an estate. A high class problem.

Rather than fret over that I recognize that having significant excess assets means I have zero financial worries (many multiple times over). There is real "mental" utility/value to that: knowing no matter what we are covered.

So, put another way not consciously spending down is another way of "spending" but for an intangible joy (peace of mind).

At least that is how I rationalize it…

 

[GBcycling]

I once read an article on the same subject. They just could not spend freely after decades of savings. Their financial advisor made a deal with them Set the annual budget for what they would like to spend. On December 31, if they have not spent their budget in its entirety, write a check for the balance to their advisor. I thought it was funny, but you get the point.

And the problem was solved

 

[ugeauxgirl]

DH is having a harder time loosening up the purse strings than I am, even though he has finally acknowledged that we're never going to spend it all. We came up with a hilarious (we think) strategy for no longer being cheap on vacation. He objects to the credit card bills when we get home from vacation, so we have begun to put all vacation expenses on our brokerage debit card- we call it the company card. The balance is replenished by our dividends, and we never get a bill. Mental accounting? Yes, but it has made for happier vacations.

 

[TickTock]

Mental accounting? Yes, but it has made for happier vacations.

If it works, it works.

 

[Saintor]

If it is budgeted and PF performs as expected, very little to worry about; the 5 years of expenses in cash-like investments takes care of the rest of my concerns.

Not FIREd yet, but that is my short term plan.

 

[HFWR]

When I fired, the $300 a month for the pension plan and the $300 a month for SS went away.

My SS, pension, and yearly withdrawals are about what my salary was at the time, so I got a $600 a month raise!

 

[timbervest]

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

Another view. A friend of mine traveled extensively with his wife after retirement. A few years ago he suffered a stroke and is bedridden. He tells me that the memories he has from their trips are enjoyable and remembering places and experience from this time, talking about them, and revisiting them online are a positive given his current situation. To each his own.

 

[Happy30]

I really struggled in the beginning and thought how will this work without a paycheck coming in lol! We put 2 of our 3 children through college and there were 2 years that they overlapped so we were shelling out over $60K a year for that! I retired 2 years ago and after my daughter graduated! This helped me to see that we definitely would not be spending that much a year going forward and that we could do this easy peasy! We own our 3 homes (1 is a rental) and have zero debt. That alone makes us both sleep better at night!

We are planning to renovate our lake house and that will cost about $600K when all is said and done. With all the craziness going on in the market right now ... it does make me a bit scared, however, I feel confident we will be ok!

The biggest thing that brings me security is knowing that I have 5+ years of money in CD ladders and MM's that are paying 4.5%+ and we will not have to sell any stock to keep afloat. I can ride out the bad times and never sell in a panic or emotional state.

 

[Anchors Aweigh1]

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 ?

Read Bill Perkins boo

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 ?

read Bill Perkins book “Die with Zero”

 

[kumquat]

I just quit working. No earned (as in paychecks) meant I had to spend savings. Easy for me, spend or starve.

 

[HMMY]

I retired 7 years ago and started giving myself a monthly paycheck equivalent to my (net) paycheck while working, so the amount I spend hasn't changed, but instead of on lunches, work clothes, and commuting, I spend more on travel and food. The travel isn't always to exotic, foreign locations. Some of it has been to visit friends that I haven't seen regularly while working so hard. Big expenses (new home, university for the kids) were paid out of separate funds. Every year I check the vpw (variable percentage withdrawal) against my age, and I've never managed to spend up to the annual amount recommended, so my portfolio grows apace. When the kids are off the family payroll and have demonstrated their money savvy, I will start doling out money gifts. Even with inflation, I typically have money left over from my "paycheck" at year's end.

 

[kilgore]

Basically as a retiree I viewed myself as self-employed. If I couldn't figure out how to sustain self-employment, I shouldn't have retired. That was 20+ years and several crises ago.

 

[sroby2020]

The switch didn't come without guilt. It helped to have consistent income streams and a good handle on regular expenses.
Planning was also a big part. Travel, large purchases, donations, just to name a few. Luckily, we didn't have to sacrifice anything to get the extras. Been retired almost 9 years.

 

[HFWR]

With some malice aforethought, my spending just seemed to fall with my “spending plan”. I use the term loosely.

 

[imnontrad]

Many of us have this problem. I heard of one person who solved this though. At the beginning of the year, this couple sets aside a percentage of their investments as their "budget" for the year. Then anything left at the end of the year gets donated to charity (in addition to their donations throughout the year). So they can either spend/enjoy it or let someone else spend it.

 

[HFWR]

Many of us have this problem. I heard of one person who solved this though. At the beginning of the year, this couple sets aside a percentage of their investments as their "budget" for the year. Then anything left at the end of the year gets donated to charity (in addition to their donations throughout the year). So they can either spend/enjoy it or let someone else spend it.

I do something similar, my “spending plan”. I get SS monthly, a small pension, and I divide my yearly IRA withdrawal by twelve, and that’s my allowance, post tax.

 

[robnplunder]

I retired only after I was sure we could maintain our lifestyle (or better).

 

[Koolau]

We still "scrimp" on things like soft drinks/tea, etc. when we eat out. But "big stuff" seems easier to spend - like travel.

 

[TickTock]

We also do things like ordering water instead of $2.99 soft drinks. And we use coupons. And stock up on $0.50 bread when we see it during the weekly grocery shopping trip. But we also don't hesitate to spend on stuff that we value - like a new car shortly after I retired (DW retired ~1.5 years earlier).

It's all about spending on what your value.

Our travel is currently constrained, for reasons that I won't go into. Once it's not, I expect us to *seriously* unleash the spending (we know where we want to go and what we want to do!).

 

[TheWizard]

I retired only after I was sure we could maintain our lifestyle (or better).

Me, too.
But what I did was take a major portion of my employer contribution to my 403(b) plan as as pension rather than retain it all in tax-deferred investments.
As a result, in year 13 of retirement now, I have a significantly negative withdrawal rate from my investments.
I like that...

 

[robnplunder]

And we use coupons.

We stop doing that after our RE. My main reason is to save time, not a tiny (relatively speaking) bit of money. Time > $ for us now.

 

[Happy Homebody]

I feel like it would be more straightforward if I didn't retire in the middle of a trade war.

My husband was getting stressed over buying a $50 item because "the stock market might crash and we could lose all our money." And said he might not be comfortable buying unnecessary things for the next few years.

I did not want to live the next few years like that. We decided to move almost all our money to safe investments.

Since then, my husband has bought $200 to $300 worth of hobby stuff and four pairs of jeans.

I have always been the more frugal one in our marriage. I probably have some money issues. But over half the stuff my husband buys is for shared hobbies, so it works out pretty good for me.

 

[skyking1]

We still "scrimp" on things like soft drinks/tea, etc. when we eat out. But "big stuff" seems easier to spend - like travel.

We have done that for years. We tip well and look at the money saved as more and better meals out. It's a win for us.

 

[Christopher13]

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 ?

Totally normal feeling—been there myself. After decades of saving, flipping the switch to spending is harder than people think. For me, the shift came when I sat down and really looked at my numbers—seeing that we had enough gave me permission to loosen up.

What helped most was starting small. I didn’t jump into big trips right away, but I let myself buy the good bottle of wine or go out to lunch without guilt. Eventually, I realized those small joys didn’t break the budget—they added to the quality of life I worked so hard for. Give yourself time, and ease into it. It gets more comfortable.