The art of spending money

Nebulous2

Hopefully this is appropriate here - I considered the budgeting and bank account forum, but as someone who struggles with spending in retirement I found it very interesting. It shows how embedded financial habits are. Hopefully the link works. 

The art of spending money - and what it reveals about who you really are - The Globe and Mail

I'm writing this in a budget hotel, while having a few days away. The hotel ticks a lot of boxes, I had a voucher to spend before the end of January, they've welcomed our dogs, and its handy for visiting one of our children. We could readily have afforded something 'better' however. 

Despite having retired, working very part-time, and having more income to come once two state pensions kick in, I'm still happy on the 1st of each month if our resources have ticked up rather than down. 

El_Torro

That article is behind a paywall. 


I sometimes wonder what I'll be like when I retire. It's still some ways off, but I've been spending less than my income for pretty much all my life. Even when I was in school I managed to not spend all my pocket money. I like to think than when I retire I'll be happy to see my net worth drop every month, I'll see if that's the reality of it though.

Nebulous2

El_Torro said:

That article is behind a paywall. 


I sometimes wonder what I'll be like when I retire. It's still some ways off, but I've been spending less than my income for pretty much all my life. Even when I was in school I managed to not spend all my pocket money. I like to think than when I retire I'll be happy to see my net worth drop every month, I'll see if that's the reality of it though.

Sorry - maybe I should delete the post. I got it free from Microsoft news.  

artyboy

This is the part of preparing for retirement that I'm dreading. Not so much for myself but for Mrs Arty, as I really suspect she'll have a hard time getting mentally prepared for the idea of decumulating net worth.

If we stick to spending 3% of our pensions per year then it will still be very comfortable, so I hope we will be able to maintain capital. But it will only take a couple of 'bad' market performance years, and I fear she'll start fretting, wanting to live on beans on toast, and cancelling all holidays...

sheslookinhot

Nebulous2 said:

El_Torro said:

That article is behind a paywall. 


I sometimes wonder what I'll be like when I retire. It's still some ways off, but I've been spending less than my income for pretty much all my life. Even when I was in school I managed to not spend all my pocket money. I like to think than when I retire I'll be happy to see my net worth drop every month, I'll see if that's the reality of it though.

Sorry - maybe I should delete the post. I got it free from Microsoft news.  

Can you cut and paste the text ?

Albermarle

artyboy said:

This is the part of preparing for retirement that I'm dreading. Not so much for myself but for Mrs Arty, as I really suspect she'll have a hard time getting mentally prepared for the idea of decumulating net worth.

If we stick to spending 3% of our pensions per year then it will still be very comfortable, so I hope we will be able to maintain capital. But it will only take a couple of 'bad' market performance years, and I fear she'll start fretting, wanting to live on beans on toast, and cancelling all holidays...

Maybe make sure you have a BIG cash savings buffer. Although not necessarily always seen as the best strategy financially, it can help to smooth over those rocky market periods, for those of a more anxious disposition.

Also maybe start spending more now, before retirement, to get more in the swing of it.

After a few nights in a nice 4* star, you might find she will not be so keen on a Travel Lodge next time. 

squirrelpie

"Hopefully the link works.
The art of spending money - and what it reveals about who you really are - The Globe and Mail"

"That article is behind a paywall."

Hmm, I can read the article and I don't have a subscription?

artyboy

Albermarle said:

artyboy said:

This is the part of preparing for retirement that I'm dreading. Not so much for myself but for Mrs Arty, as I really suspect she'll have a hard time getting mentally prepared for the idea of decumulating net worth.

If we stick to spending 3% of our pensions per year then it will still be very comfortable, so I hope we will be able to maintain capital. But it will only take a couple of 'bad' market performance years, and I fear she'll start fretting, wanting to live on beans on toast, and cancelling all holidays...

Maybe make sure you have a BIG cash savings buffer. Although not necessarily always seen as the best strategy financially, it can help to smooth over those rocky market periods, for those of a more anxious disposition.

Also maybe start spending more now, before retirement, to get more in the swing of it.

After a few nights in a nice 4* star, you might find she will not be so keen on a Travel Lodge next time. 

Ha! Yes the cash buffer is definitely going to need to be substantial... booking holidays is already a painful arm-twisting exercise, and that's with a very decent income coming in every month.

Still, there is a week in a 5* hotel coming up soon. And after our last visit to a travelodge (20 years ago), safe to say it won't be repeated. So could be worse 

DT2001

I managed to get through, clicked on Personal Finance tab and then scrolled to bottom of the page.

I think it is spot on and realising your own attitude to spending is the key. What gives you pleasure and undoubtedly value for money (We are MSE forumites after all). I think we have loosened the purse strings as we near retirement but like nebulous 2 will use budget hotels especially if say for an early flight. We justify it, in our own minds, by e.g. then buying tickets to an expensive sports event even though the later wasn’t dependent on the former.

MalMonroe

I've had a lifelong weird relationship with money - and so has my brother. So it's obviously a family thing but weirdly, my parents (who never did have money troubles, to my knowledge - so why didn't they teach us, I wonder) always said that they knew they didn't have to worry about me as I 'always landed on my feet'. Whereas they worried like billy-o about my brother. It's strange because my husband left home when our daughter was 9 and so I went out to work full time, was a single parent and struggled in every way, including financially, for the following 12 years. And beyond. So I'm not sure where that idea came from. Neither my brother (also married but no children) nor I had a clue how to manage our finances. But we both always put on a brave front and nobody ever seemed to know that we were absolutely useless.

It wasn't until I had a DRO a few years ago - and three years after I retired - that I really learned how to manage my income, small as it was. It was a necessity.

I'd just love to know why, when funds are low, I have a major urge to spend but when my bank account is quite healthy (which is the norm now I know what to do!) I do not want to spend an extra penny, anywhere. I have always been like that - and in the past it led to disaster - thankfully now I can control my spending.  

The art of spending money for me, in the past amounted to 'spend it when you haven't got it. Save like a miser when you have.'

The job I had for a few years before retiring was working for a millionaire (inherited wealth, he hadn't worked for it himself) and his motto was - an oldie but goodie - look after the pennies and the pounds will look after themselves. He did ensure that he claimed everything he was entitled to and always claimed tax back when he'd been on holiday too. It annoyed me that he was so very wealthy and still penny pinched. But he had the right idea, I guess. He has a bunch of children so they'll inherit his wealth because there's just no way he could spend everything he has. It's nice for some, I guess. 

I have to say that, I would NEVER book into a budget hotel prior to flying on my holiday. I usually do stay in a hotel near the airport the night before but it's never budget.  For me, that hotel stay is a part of my holiday - the start of my holiday - and I save up for it. I deserve a bit of luxury and I won't do budget. (Although I do love the idea that the budget hotel allows dogs!)

Sea_Shell

It's funny what 'value' we put on what we get for our money.

We've stayed in a few 'fairly' expensive hotels, and TBH, on reflection, I wouldn't say that they were worth the extra over and above a Premier Inn, on balance.    We'd draw the line at Travelodge mind, unless we had no choice!

Yes, they may have had various things like a copper roll top bath in the room (why?), some fancy complimentary toiletries, room service tea/coffee (rather than a kettle etc in the room), which in reality just meant you had to wait 10 mins for a lukewarm drink to be brought up!!   Is that worth an extra £100+ per night?

Do they get better 'value' the MORE expensive you go?!?