From saving to spending!

Linton

zagfles said:

I don't know why anyone considers having excess income a "problem". If you spend less than you earn, then as Micawber says, you should be happy. Survey after survey on "happiness" shows that once your basic needs are met, increased income doesn't make people more happy. So don't feel under any obligation to spend what you don't need, any more than if your apple tree produces too many apples for you to eat you shouldn't force yourself to eat more.

Disagree about supporting charities that contact you. Support those that DON'T contact you, those who don't waste their money on marketing whether by post or even more annoyingly by phone, or even much more annoyingly (and wastefully) use chuggers!

Maybe consider grandchildren (or children) if they haven't yet bought a house, high house prices are probably the biggest financial problem the young face, contrary to popular belief it's not low wages (full time min wage is £18k a year), it's not student loans (repayment threshold over £25k for current plan), it's the stupid amount they need to stump up for somewhere to live.

It would seem you arent speaking from experience.  Spending a couple of weeks swimming around coral reefs in the tropics certainly adds to our happiness even though it doesnt really count as a basic need.

Yes, providing for the future of children or grandchildren, if you have them, may increase your and their happiness.  However it is more than possible that at least your children would be already retired or within sight of it when you go and should have sorted themselves out by then.  What is the point in leaving them a small fortune?  Even your grandchildren could be past the time when they needed a house deposit.  And quite a few people dont have close relations anyway.

So what do you do?  You either shrug your shoulders and say it doesnt matter,  your worldly wealth can all go to some 2nd cousin once removed who you have never met as far as you are concerned.  Or you try to do something of benefit to yourself and/or other people whilst you are able to make those sort of decisions. 

zagfles

Linton said:

zagfles said:

I don't know why anyone considers having excess income a "problem". If you spend less than you earn, then as Micawber says, you should be happy. Survey after survey on "happiness" shows that once your basic needs are met, increased income doesn't make people more happy. So don't feel under any obligation to spend what you don't need, any more than if your apple tree produces too many apples for you to eat you shouldn't force yourself to eat more.

Disagree about supporting charities that contact you. Support those that DON'T contact you, those who don't waste their money on marketing whether by post or even more annoyingly by phone, or even much more annoyingly (and wastefully) use chuggers!

Maybe consider grandchildren (or children) if they haven't yet bought a house, high house prices are probably the biggest financial problem the young face, contrary to popular belief it's not low wages (full time min wage is £18k a year), it's not student loans (repayment threshold over £25k for current plan), it's the stupid amount they need to stump up for somewhere to live.

It would seem you arent speaking from experience.  Spending a couple of weeks swimming around coral reefs in the tropics certainly adds to our happiness even though it doesnt really count as a basic need.

Yes, providing for the future of children or grandchildren, if you have them, may increase your and their happiness.  However it is more than possible that at least your children would be already retired or within sight of it when you go and should have sorted themselves out by then.  What is the point in leaving them a small fortune?  Even your grandchildren could be past the time when they needed a house deposit.  And quite a few people dont have close relations anyway.

So what do you do?  You either shrug your shoulders and say it doesnt matter,  your worldly wealth can all go to some 2nd cousin once removed who you have never met as far as you are concerned.  Or you try to do something of benefit to yourself and/or other people whilst you are able to make those sort of decisions. 

Swimming round corals reefs - been there done that (several times) and will probably do again sometime. Also not particularly expensive (unless you use some rip-off tour operator), I was a penniless student when I did it first time. I enjoyed that holiday more than other much more expensive ones. In fact overall in general I enjoyed myself more when I was a penniless student. 

The point is that you shouldn't see it as any sort of "problem" if you have more than you spend. If you think spending more will make you happier, go for it. For some it might make them less happy. For others it'll make no difference.

Yes think about who you could support, whether charities or family. Obviously not everyone will have family that need it. I've told my parents I want nothing leaving to me in their will, they should share it between their grandchildren. And if they don't need it, their favourite charity. 

TBC15

Well this threads going well. At what point do you decide let go from  the  we need it to the we want it? what’s the acceptable level of reduction to the head stone. If I bought a new car it would go against the grain ( 2-3 years old has been the norm).

enthusiasticsaver

We have let go of the needs and will now spend on wants.  We treated ourselves to 2 e bikes last year and have had many pleasant days out on them as well as using them instead of the car on numerous occasions.  They weren't a need but we wanted them and had the money spare so why not? 

savingmore

Thanks for starting this thread.  I too spend my time thinking through when we can ‘go’.   36 months until we both have sp, which together with one DB which we already have (small) will give us our projected income.  however we do have a pot in excess of half a million 63% s&s 37% cash.  know we could go now, but not trusting that’s it enough yet, as want to spend £175,000 moving.   my mental goal is another £40,000 in the pot, so work on spreadsheet each month to see when that is likely.  i think i will also struggle to spend! 

ossian

Marcon said:

fly-catchers said:

But is there any suggestions as to get in the mindset of actually spending money rather than mainly saving it? 

I wish I could find the link, but I can only remember the gist of a bit of research done a year or two back. IFAs/wealth managers were asked which piece of advice clients were least likely to follow. The 'winner', by a large margin, was that people in the 60+ age group found it very difficult to follow the advice 'spend it, you can't take it with you'. Interestingly, that seemed to hold good even where the individuals concerned didn't have children or other close family members/friends to whom they could leave their mortal spoils.

Maybe some reverse budgeting - instead of setting yourself a maximum spending target, how about a minimum? Much more fun, too!

Personally I find too little retirement planning writing considers the desire to leave a meaningful legacy.  When I was younger I assumed my children would be able to make their own wealth.  Now I am worried, especially for the disabled one.  I have just retired but am planning to leave a portfolio that will survive perpetually.

ussdave

Marcon said:

fly-catchers said:

But is there any suggestions as to get in the mindset of actually spending money rather than mainly saving it? 

I wish I could find the link, but I can only remember the gist of a bit of research done a year or two back. IFAs/wealth managers were asked which piece of advice clients were least likely to follow. The 'winner', by a large margin, was that people in the 60+ age group found it very difficult to follow the advice 'spend it, you can't take it with you'. Interestingly, that seemed to hold good even where the individuals concerned didn't have children or other close family members/friends to whom they could leave their mortal spoils.

Maybe some reverse budgeting - instead of setting yourself a maximum spending target, how about a minimum? Much more fun, too!

I wonder if some of that could in part be people in the accumulation phase planning their retirement income to be too high.  The figure I'm aiming for completely makes sense from a budgeting perspective but it's hard not to look at the headline yearly income and not feel a bit worried.  It's a good 1/3rd lower than my current income...and despite knowing that I won't be paying the mortgage, pensions savings, etc part of me still feels I will need more.

SMcGill

I know I will struggle when I retire, at least for a while, because for years I’ve conditioned myself to think that saving = good. I reached my ‘number’ last year and what did I do? Yup, I upped the number. 

I’m actually enjoying work more now than for years just because I have the financial freedom to walk away at any point. 

fly-catchers

Thanks for the comments. Finally out the door today after one the heaviest days I have known in 32 years delivering. Nothing but a card (no money in it) and a casual goodbye as I left! So good to know loyalty is not recognised by RM these days!
Plan on upgrading the electrics in my greenhouses, New fences and work to the house. And when normality returns more regular visits to London and the theatre, cinema, galleries I love so much. As a cat lover may well volunteer my services to the Cat Protection League once I have had a well earned rest!       
I still intend moving my money around to get the best interest from it. But spend it as well! Roll on 2021 for my first full year of freedom!

balbs

If you have spare money after budgeting you could consider 'investing' in others... Kiva is a great system for loaning money to businessess in developing countries which then repays you without interest (but thats pretty similar to our banks at the moment :-).  Ive been with them years and never had a business default on me (loans are  divided up anyway so the risk is extremely low)