Are you struggling to shift from a savings mindset to a spending mindset in retirement? You’ve diligently saved, but now it’s time to enjoy your money, and you’re hesitating. Spending should not be stressful in retirement; it should be intentional. By creating a structured plan, reframing how you view money, and running projections, you can start enjoying the wealth you’ve accumulated without fear or guilt.
Here’s your guide to transitioning from a saver to a spender and truly relishing your retirement savings.
- Create a Detailed Financial Plan and Keep It Updated
Retirees often fear not knowing how much they can spend without running out of money. A clear, numbers-based financial plan updated as life changes can help overcome this fear.
In the book “Die With Zero,” Bill Perkins highlights that money is meant to enhance life experiences, not accumulate indefinitely. The key lessons include valuing experiences over possessions, timing the spending on experiences for maximum joy, and giving while you’re alive to have a more meaningful impact. Shift your mindset from accumulating wealth to maximizing life experiences.
- Start Small: Increase Spending on a Meaningful Habit
If spending still feels uncomfortable, start small. Increase spending on something that brings you joy gradually. Maybe it’s dining out, buying a special bottle of wine, or taking up a hobby like painting or golf. Identify one spending category that excites you and increase spending there without guilt.
- Or, Jump into the Deep End with a Major Splurge
For some, gradual increases in spending aren’t enough. Consider a major splurge—a dream vacation, a new car, a home renovation, or gifting a loved one. Making a big, intentional purchase can reframe your mindset toward spending. Pick one significant purchase, model it in your financial plans, confirm affordability, and go for it.
- Do a Regret Exercise: What Would You Regret Not Spending On?
Imagine being diagnosed with a terminal illness next month. What would you regret not spending on? Who would you have wanted to give to while you were alive? This exercise can clarify what truly matters, helping you prioritize meaningful spending. Write down three things you’d regret not spending on and commit to making them happen.
- Understand the Perils of a Scarcity Mindset
A scarcity mindset focuses on what you lack and can cloud decision-making. If you always worry about not having enough money, you may curtail spending unnecessarily. Identify how scarcity affects your spending habits and actively work to change it.
- Evaluate Spending Curves
Understand spending curves—spending more in early retirement and less in later years. Plan for a gradual decline in discretionary spending, tailored to your active years. Adjust your spending on the Boldin Planner to reflect this.
In conclusion, making the shift from saving to spending in retirement requires a structured approach. By creating a financial plan, running projections, and prioritizing meaningful experiences, you can savor the retirement you’ve worked hard for. Use your money as a tool for a fulfilling life without regrets.
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