Moving to a spending mindset

Stubod

Flugelhorn said:

Thinking about it, that is effectively how I have my spreadsheets set up, so there is the underspend and while that stays at a reasonable level it is Ok to buy things you like. 

I was pondering on this in the shower, there is a limited time to be out and about spending and enjoying your savings, I dealt with the finances of a couple of elderly relatives - there was far more than I expected in "savings" (particularly as one had always pleaded poverty) - I looked back and it was just that over time (mainly over 80)  they spent less and less, went out less, got rid of the car, didn't go shopping for lots of clothes, didn't go on expensive holidays - both had attendance allowance so were accumulating.
Right - new car it is then.

..yes get yourself a new motor!..

we were due to start traveling last year but covid got in the way, so our current "accumulative" under-spend is now well into 5 figures!!

waveydavey48

Interesting thread. I think many of us on here are frugal. I don't mind spending but do object to getting ripped off. The restaurant wine at £25 is a good case in point.

I'm happy to pay the going rate for nice food which has been prepared by someone who can cook better than me, in a nice ambience but charging £25 for wine which probably cost the restaurant less than a fiver is beyond the pale and, I think, counter productive as many people will simply have a beer instead or just not bother coming. 

jim8888

Great thread, and one of my biggest challenges in retirement. Having worked and saved and invested for over thirty years, mostly in anticipation of these retirement years, my wife and I have a pretty comfortable outlook, on paper. But in our heads? Having no earned income coming in, but most of our expenses still going out, what a shock to the psychological system. On the one hand I feel that this is what we've saved for, but spending it now feels almost wrong on some level. Almost dangerous too, wondering about the Black Swan event that by definition we can't see coming. 
A few years ago I set up a target spreadsheet for my investments and what I hoped I'd have invested from 55 onwards. I'm ahead of that, which I do find comforting, but often wonder how I'd feel if this was going the other way? As other posters have noted, we'll probably always be careful with money because that's just who we are, but I'm reading this thread with interest about how others are trying to cultivate a more spending mindset.

OldScientist

Have exactly the same problem as the OP (and, it appears, most everyone else) despite having a regular income from DB pension (investment portfolio is for legacy, topping up in case of need, and in case of my early demise - together with life insurance). We do pay ourselves a monthly allowance - mine tends to get lost in the same account as the rest of the money so I end up not spending it (even though I keep a record of personal expenditure - it has been around £3-4 per month for the last 3 or 4 months) - thinking about separating this out into another current account (the Virgin one paying interest - don't know why I haven't already got one of those!). One problem is that we are still saving to move to a more expensive house (we want to move from city to seaside - the last year of house inflation has been painful for us) and I quite like to see the amount we have set aside for that increase.

Other than that, we're not particularly driven by spending (we like our own cooking, enjoy holidays but less in need of one since giving up work) and are generally content (which is probably hard to put a figure on)...

Alice_Holt

  I, too, find it very difficult to overturn the habits of a lifetime (that have enabled me to build capital out of income, and thus provided me with life-choice options).
  Also I get more pleasure from a value for money purchase than an extravagant purchase rarely used. 

 Some things that help -
   Having a spending / de-accumulation budget (rather than a saving budget) as mentioned above;
   Reminding myself that I'm effectively buying at a 40% discount (by reducing the value of my estate subject to IHT) - per Flugelhorn;
  Spending on enjoyable experiences, and treating family, friends, and colleagues;
  Funding my nieces SIPP's; 
  Making regular payments to charities I support.
  
  
     
          

Albermarle

Interesting thread. I think many of us on here are frugal. I don't mind spending but do object to getting ripped off. 

I think if you are frugal then you do mind spending . Probably more accurate to say you are careful, but will spend money on things you really want and like value for money, which is not quite the same thing . These posters are definitely frugal, although I suspect the second one is a typo.>>

 I now allow myself £10pm pocket money. Whilst it isn't much, it means I do buy nice treats and things. 

We do pay ourselves a monthly allowance - mine tends to get lost in the same account as the rest of the money so I end up not spending it (even though I keep a record of personal expenditure - it has been around £3-4 per month for the last 3 or 4 months) 

jim8888

Albermarle said:

We do pay ourselves a monthly allowance - mine tends to get lost in the same account as the rest of the money so I end up not spending it (even though I keep a record of personal expenditure - it has been around £3-4 per month for the last 3 or 4 months) 

Respect, if true 

NedS

Albermarle said:

My friend is not well off,in fact she has less than I do,

So a philosophical question . Who is happier - you with more money , or her with a drawer full of expensive scarves and chutneys ?

Wanting Value for Money is a lifetime habit and why change ? It is a good habit .

That is not the same as not buying things that you want and can easily afford . That is the part that many of us on this forum probably need to work on .

However I can say that if I had £5 million , I still would baulk at paying £25 for a bottle of wine in a restaurant 

I don't have much to add to this excellent reply really.

It's probably easy for me to say, as I'm not quite at the retired stage yet and I can imagine I will go through the same 'battles' you are, but I envisage I will resort to the budgeting methodology that I have successfully used for the last 20 years whilst building up our assets. I expect to have a very clear understanding of what our income is and what our outgoings are, and that we must live within our means. Outside of that, once the essentials are covered, I have no issue spending up to our budget as we do now. I don't expect anything to change - I will still want value for money and I will still prioritize some things over others, depending on what is important to me at the time. I think the only thing that will change is what those priorities are. Right now, I'd rather go without the little daily treats to save up for the big things like a nice holiday abroad. Maybe big holidays will be less important when I'm no longer working and I'll be happier to pay £4.50 for a slice of cake, something I would NEVER even consider doing now!!

I imagine your friend is making the same choices. Just because those things (a new scarf, a jar of chutney, a slice of cake) are high on her list of spending priorities, it does not mean they need to be high on yours. We all have to make choices about what we spend our limited resources on (unless we've been lucky enough to win the Lotto), so spend what you can afford on what makes you happy.

Farside71

re the scarf example.

What would not make me happy is spending money on an overpriced scarf of mediocre quality just because I can.  Neither would I find buying the cheapest I can find satisfying either.  What would give me satisfaction is finding a scarf of excellent quality and paying what it's worth, even if that was 30 or 40 pound.

I'm as tight with money as everyone else on here, but what I've learnt personally is that I do not mind paying a decent amount for goods or services that are worth it.  I've been lucky enough to be able to take this approach with most things in my life, whether it's technology, footwear or garden/power tools etc for the last few years.  

But ultimately life is too short to worry I think, and everyone should do what makes them happy.  There is no rule in retirement that says you have to spend all you money.

OldMusicGuy

I retired at 60 (I'm now 64) and I have adjusted to a spending mindset. It's taken a while because I am very risk averse and have no DB pensions, so rely on savings and my SIPP. So I was very wary of sequence of returns risk in the early years but as I am now speeding through retirement (time passes quickly), my wife and I have decided to enjoy our "go go" years a bit more. Nothing lavish (we aren't big holiday people) but we are doing more trips out and eating out. I've loosened the purse strings a bit because we realise how quickly life slips away and we can be more frugal if needed when we are in our "go slow" years.