Spend Guilt-Free: How to Shift from a Savings to Spending Mindset in Retirement
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- čas přidán 5. 08. 2024
- One of the most ironic things about retirement spending is that the people who have saved the most money are often the same ones that have the most difficult time spending that money.
We often think that if we save up enough money or build up enough of a portfolio that in retirement it will open up unlimited fun and enjoyment.
The reality is, for those who have saved well, one of the hardest things you'll find about retirement is the difficulty you'll likely face trying to spend some of that money.
James discusses how you how you can shift your savings mindset to a spending mindset.
Questions Answered:
Why is it so difficult to go from a savings mindset to a spending mindset?
How do we start making the shift with our mindset?
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⏱Timestamps:⏱
0:00 Intro
4:57 James' perspective
7:48 Example
10:47 We need to realize this
14:52 How do we reframe?
16:58 Pillar 1
18:38 Pillar 2
19:19 Pillar 3
20:36 Pillar 4
22:25 Pillar5
24:34 Summary
27:18 Outro
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I'm still not going to pay $8 for a box of candy at the movies! Walgreens is on the way...
It took me some time to get my retirement sea legs and spending legs in place.
But as you age you learn that this is the main event and not a dress rehearsal.
Now in my 70s we are spending freely traveling and doing the things that we enjoy...
That quote from James Clear is so true: "It's hard to change your habits if you never change the beliefs that led to your past behavior." Changing our beliefs and how we see ourselves is the key to making long-lasting changes in how we spend our money in retirement.
Great video, James!
Excellent info on this topic. The only pillar I'd add is buy your energy back. As we age, energy goes down. We're no longer spending our energy on things we don't want to do and can afford to hire someone else to do. We want to use our energy on things we love to do.
One of your best videos, James, at least for me. I am retiring in 192 days and spending after a lifetime of saving will be an issue for sure. Well done
I am on the cusp of retiring and the looming transition from aggressive saving to living off the portfolio is really tough to confront.
I plan to start spending more the last 2 years that I'm working. Get some practice at it
When I fly in retirement I go business class. And no more crappy hotels. It`s three and four star hotels. Yes it is more expensive but you can't take it with you. My heirs will be ok.
It is difficult moving from a saving mentality to a spending mentality. After all, you spend much more of your life-saving than you do trying to spend it. Thank you for this insightful video.
This may very well be your best podcast yet. It’s so important for a high quality of life! I’m sure I’ll listen to it several times to reinforce some changes I need to make as an early retiree.
You've given so many great podcasts about finances that were really valuable, but this one was something completely unique and so importantant, but rarely discussed or thought about.....thanks for reminding me ...great podcast!
My mother set a great example by helping her children and grandchildren with monetary resources while she was alive. She said she enjoyed seeing how it paid off with helping with education, homes, experiences she could participate in. She could have done more for herself in her later years, but she did want to leave an inheritance. I appreciate the reminder that quality of life is important, just upgraded my airplane seat for a trip. I really enjoyed the extra perks! I’m 2 months to retirement, going to give this serious thought.
I definitely needed this video. I’m retired 6 years and I’m still afraid to spend any of my savings. As a result we live solely off of social security.
Funny about the $5 MMs. I had a similar issue when I wanted an item from Amazon for an in-progress project and it took a moment of thought to pay the $2.99 for same day delivery. LOL.
This is an exceptional post with a really great outline to help in making a shift in mindset. I’m now subscribing!
Good habits are hard to make but easy to live with, but sometimes require modification or a loosening of the reins. Thanks for the tremendous financial content, James!
Going to the gym is how many people solve the procrastination of working out at home. All the equipment at home is not nesesarily going to stop the interruptions and distractions, whereas opening those gym doors is a real commitment, and while driving there you have time to reflect and plan your workout.
Excellent presentation, as always. This month, I let loose from my normal Scottish frugality and upgraded my outbound flights to First Class in response to poor seats available in coach. It felt good, saved my energy and lifted my mood for the rest of the trip I may not ever use that tactic again but it was great and directly related to your discussion. It is a new mindset. I still shop at Costco, and we drive a 10 year old, purchased-used, car, but am willing to enhance for quality of life. We have also gifted substantial amounts to our adult sons so they can benefit from investing and home purchase in their 30s, instaed of their 50s
Great examples. Thanks for sharing, Bruce.
Reminds me of a story I read in a book years ago. The elderly mother is living on and toast despite a huge portfolio that she follows daily. The kids tried to tell her that she could live on five times what she is, but when she asked, how much would I have to pay in taxes on that, she declined, saying "I can't afford that!"
So much value in this episode! Looking forward to retiring at 55!
I also prefer to spend money with helping my kids and grandkids while I can share the experience with them than leaving money behind. What impression can I leave by help pay for college education or taking my granddaughters to Paris for her 16th birthday. Or take the entire family on a family vacation on a Disney cruise!!! Man this is what inspires me to save for retirement
So on point for me. I love the idea of spending to save time. I am glad you also endorsed GIVING to charity as a good way to spend money - luckily I find that part easy. Thank you James.
Such a great episode and much of it resonated. The biggest gift I've given myself is to, as my wife says, turn left when boarding the plane instead of turning right. It makes all the difference in the flight and is a nice reward for years of saving and planning. It doesn't feel natural yet, but I think I'll get used to it /wink
One of the reasons that American retirees don't spend is that we live in a very insecure society.
Many of us are petrified about an enormous medical or long-term care expense.
And so many basics are so expensive that we get very conservative with our money. What if????😮
Also so much of our wealth is tied up in stocks, which can be very undependable.
Love this channel. Very very good!
Good habits don't change just because you retire... Instead of wasting, give it to the kids or charity. When you are retired, your time is worth zero if you have nothing important to do anyway - I don't think most people make the most of their time regardless of age, so the opportunity cost is low and running around town to save money gives you something to do lol.
You have a very good outlook on life. Wonderful that you're so insightful at such a young age. Your values around money are spot on with mine.
I definitely need needed to hear this!
You've been thinking about how people can apply Bill Perkin's book "Die With Zero". Great work.
thank you!
Really been enjoying these topics. See myself in so many of these scenarios.
That was great and just what I needed to hear at 66, retired for about 2 years now. However, I just computed roughly my "value" of 1 hour remaining life expectancy (800 000 $ nest egg + pension). Rather $10 than $100 per hour. Hypothesis: returns offsetting inflation (= reasonable but not even worst case scenario here in the EU), 16h per day (waking time), before taxes. So I try to rather splurge on things that are important to me (health, my environment, art and design, backpacking, family) and save on the rest (convenience when travelling, car, other stuff, eating out ...). Walking or cycling to a store, the gym or the post-office can be nice and give kind of a workout at the same time. DIY keeps you sharp ;-)
This has been my experience over the past 7 years of retirement. Very helpful.
This is great!
I want to spend retirement visiting family and friends though out the United states without thinking twice. Take a trip when I see a good deal come through. This is all more with what to do with my time and happiness then keeping money in the bank. Building memories is priceless.
Damn this was powerful!! I’m sitting on $1.5 million and I can’t get myself to buy those M&Ms. I need to change desperately or die rich
Same! I am spending, on small things for fun times (like items for the themed dances I'll be attending), but I came to this video because I feel guilty that I can do this AND no longer work. It's such a foreign mentality after working so hard and being so responsible.
I'm hardwired to think the hotel minibar is financial ruin!
For me, saving equals choice. I can choose to spend on anything at any time. However once I spend, that choice is gone.
Well foolish spending is foolish spending regardless of your level of wealth.
I have just retired and I have chosen to live below my means. That doesn’t mean I will enjoy retirement any less or do without. It means I will live more frugally than I have to.
$5 m&m is not foolish spending
Got the most out of this video out of all his vids.
I think he is missing the point. It's not what is your time worth but what would you be earning? By going to a convenience store and buying M&Ms you earned $4.00 instead of spending $5.00. "A dollar saved is a dollar earned" said in 1968 and still true today.
This got real.
I never get a: drink, appetizer, or dessert at a restaurant either. The math just doesn't add up when comparing value! I'll know I flipped my mindset when I make an entire meal out of appetizers and desserts lol.
That's a very hard shift to make, I am just at 1 year into my retirement, and we still have that same mineset. We are living off of my portfolio, I have not taken my SS yet, and watching my portfolio lose 10 to 14 K a day within the last 2 weeks is a bit unsettling. Our financial adviser/planer tells me don't look at the market daily, it will drive you crazy, that we are just fine, and don't worry if we need to we will make adjustments as we go as needed.
Your adviser is absolutely correct. There is no need to constantly be checking your balance. As long as you have adequate cash reserves to cover ongoing expenses, you should be focused on enjoying your retirement. Of course, it's a difficult transition, but it starts with trusting the plan you've developed.
If you have the time, walk to the 7-11 and get the same bag of M&M's for a dollar. You'll burn more calories walking to and from the 7-11 than you would have staying in the hotel.
Life is too short not to valet park!
I don't care how rich I am, I refuse to pay $5 for a bag of M&M's.
Long story short... if you aren't going to be happy eating those $5 M&Ms, don't buy them. Some people get joy in having a big bank account... if that brings joy, then don't change. That said, you don't skimp where you don't enjoy living your life (like wearing uncomfortable shoes, or drive an unsafe car).
Zero benefit from this podcast, he acts like you’re doing something every minute of the day funny