From accumulation to de-accumulation?

Apollo22

thanks all, and I will look at the other post. I do budget on a basis monthly and I have realised that even with I choose to ‘beat’ the budget. It’s madness. I have recently created a ‘fun’ pot which even then I tend to save for a ‘special’, when intellectually I know everyday is special. I have even considered the 40% IHT discount. Perhaps it’s early days and small steps and being a little more kinder to myself.

I do ‘pay’ myself everyone month but recently had a big bike purchase and seeing the annual pot drop so much before the end of the year, really struck me and felt my instinct to save again, even though I don’t need to.

ali_bear

It's not like you're going to be buying a new bike every year is it?

Retirement can take a bit of getting used to. Give it a year or so. In the meantime, plan and do some things you've wanted to do for a long time. Book a Santander ferry ticket for next May, while they're cheap?

StewedApple

However I still don’t treat myself to small things - coffees, lunches out and worse of all, I don’t spend the money on stuff like enjoy like riding my motorcycle.

You've learned a lifetime's habits of living frugally. Coffee's overpriced (take a look at the threads where people are amazed they've spent £200 a month on it without realising).

Fill your tank, ride you bike, and take a flask and some sandwiches, and enjoy your retirement.

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/82149965#Comment_82149965

Pretty much what I do - I think! Normal day to day expenditure, bills, council tax etc is covered at present by an ILG ladder in a SIPP switching to maybe an annuity later on plus SP - when it kicks in.

For anything else, there is another SIPP invested in global tracker ETFs - the luxury pot if you will.

The difficulty I have is spending money when no earnings are coming in - as I am so used to spend being more than covered by earnings and thus not concerning myself too much with spending. Also ingrained from my Northern upbringing is the mantra of if you need to spend you need to earn. I also worry that I'll run out of money - despite all the most pessimistic calculations concluding that is highly unlikely.

For sure it is a change of mindset, but I too find it difficult to change after 40 odd years of earning habit.

poseidon1

https://forums.moneysavingexpert.com/discussion/6684653/from-accumulation-to-de-accumulation

Well in your case you could start by breaking your current habit of having your interest on fixed deposits moved from paid annually ( or longer) on maturity, to paid monthly.

Your penchant for accounts with two/three year maturities makes no sense for someone who wants to de-accumulate.

With monthly interest dropping into your account in addition to any pensions, having that regular income piling into your current account provides the regular cash flow for you to at least consider regular discretionary spending.

My sense is your maturity interest on deposits is automatically rolled into the next fixed arrangement, so denying yourself the opportunity to spend as it arises.

As for what you actually spend it on, obviously down to you.

As an example in my case never owned brand new cars during working life , but have moved away from buying second hand cars outright, to 3 year leasing agreements. Now on my third new car since 2019, and now find the idea of owning a car quite quaint.

katejo

https://forums.moneysavingexpert.com/discussion/6684653/from-accumulation-to-de-accumulation

I retired 5 months ago. I have no problem with spending on cafés/occasional meals out. I wouldn't have retired when I did if I couldn't do that. I find it much harder to persuade myself to spend my pension lump sum on more expensive travel ideas. I feel that once I touch it, it will disappear and that I am being greedy. I have been on holiday since finishing work but nothing ambitious and only paid for from my regular pension income.

katejo

I do have a DB pension but still find it hard to spend on certain things. Exactly the same as when I was earning.

katejo

My budget is also envelope based (YNAB) which I have been using for 12 years.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82150262#Comment_82150262

As an example in my case never owned brand new cars during working life , but have moved away from buying second hand cars outright, to 3 year leasing agreements. Now on my third new car since 2019, and now find the idea of owning a car quite quaint

My first action upon retiring was to buy a new car( well an ex demo- this is MSE). I had a company car for 35 years, so decided I could not live with a small/old car and forked out £25K of my own money ! I really like the car and it has proved a good buy, and my retirement finances were hardly affected. So it was kind of a good lesson, and helped relax me about spending rather then earning.

After some nightmare experiences with leased company cars, it might be quaint, but I see leasing rather than buying outright( rightly or wrongly) as similar to leasehold and freehold for property.

DiamondLil

As we've aged, our spending has changed. We now spend less on fun and more on necessities - help around the home; taxis instead of driving our own car; paying others to do home maintenance; and not forgetting dental treatment !