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HERE’S A FINANCIAL topic on which I claim scant expertise: spending. Still, I’ve belatedly been getting a lot of practice.
Over the past four years, I’ve spent more freely than at any time in my life. While part of it might be explained by post-pandemic splurging, mostly it’s because I finally convinced myself that I had more than enough saved for retirement. Added to that has been my recent cancer diagnosis, which has prompted Elaine and me to take our spending to a whole new level, as we attempt to cram a retirement’s worth of travel into the limited time I have left.
I can’t claim to be entirely comfortable with all of this. To counter my unease, I fall back on seven rules that—I hope—will make my spending less impulsive and more thoughtful.
1. The dollars that bring the greatest happiness are those we don’t spend. If we don’t have enough set aside in a bank or investment account to feel financially secure, we’ll suffer ongoing money stress, and the stuff we buy likely won’t come close to compensating. How much do we need to feel safe? The sum will differ for each of us. For me, today’s amount is considerably larger than it was when I was in my 20s and 30s, and more oblivious to risk.
2. Lower fixed costs mean fewer financial worries. Want to stress less about money? The two key steps, I believe, are not only keeping at least a little money in cash investments, but also holding down fixed living costs such as mortgage or rent, utilities, insurance premiums, property taxes and so on. The lower these costs relative to our income, the more financial breathing room we’ll have.
3. Don’t spend under the influence. We might think we’re independent thinkers who make clear-eyed purchase decisions based on our own unique personal preferences. The reality: Our consumption choices are often heavily influenced by corporate marketing, what our friends purchase and how our parents spent when we were growing up.
For instance, my father loved to eat out, and I think I’ve long been influenced by his behavior. Indeed, in the four years since I moved to Philadelphia, Elaine and I have tried many of the city’s finest restaurants. But now, I’m wondering whether I’m suffering from restaurant fatigue—because I’m just as happy when we sit in the park, eat a takeout salad and surreptitiously drink a bottle of wine.
4. Ponder pleasure per dollar spent. Just as our inexpensive dinners in the park deliver as much happiness as pricey restaurant meals, the pleasure from other small purchases is often disproportionately large relative to the price tag.
For example, while I continue to be wowed by the six-figure remodeling project we undertook last year, I can’t claim that the happiness I’ve received has been proportional to the cost. Yes, the cumulative pleasure might be 1,000 times greater than that from a takeout pizza—but, let’s face it, the pizza would only cost $20.
5. Looking forward. I like to book our vacations far in advance. Why? With the help of the internet, I enjoy researching countless possible trips and, along the way, I get to take all kinds of wonderful vacations in my head. And once we settle on a destination, there’s the chance for months of eager anticipation, which is often almost as much fun as the trip itself.
6. A gradually rising standard of living is a great pleasure. For our December flight to London for my son’s wedding, I booked us seats in premium economy—a marked improvement over regular economy, where I tend to sleep fitfully and arrive feeling wretched. Premium economy is the small luxury I’ve allowed myself in recent years for overnight flights to Europe. After all those decades in economy, it feels like a huge improvement.
After I booked our London tickets, I noticed on the British Airways website that I could upgrade us to a flatbed for $1,064 apiece. My younger self would have considered that an unthinkable extravagance. My older self jumped at the chance. Okay, maybe not jumped. But my dithering over the decision probably only lasted 10 minutes.
7. Giving can be as satisfying as spending. Given my diagnosis, I could spend with reckless abandon—and I certainly shouldn’t be fretting over a $1,064 flatbed. But every dollar I spend is a dollar that won’t go to Elaine and my two kids, and that’s more important to me than my own comfort. Whether it’s family, friends or charity, there’s great pleasure in being generous with our time and money—a pleasure that outweighs and outlasts anything I can imagine buying.
Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X @ClementsMoney and on Facebook, and check out his earlier articles.
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Thank YOU Jonathan! Your observations are valuable to those folks experiencing the ‘Good’ retirement we like.
I’ve followed many rules of wealth accumulation until they became habits. Many of which, my spouse couldn’t follow and caused her to flee the family. Such is life.
The two sons will have a trust to begin managing when I pass which will be a very good inheritance.
My money is mine to spend.
So, now in the twilight years spending the earned bounty is actually fun!
The money gives great freedom and fosters spontaneity. When cost isn’t a consideration, fun follows.
It’s breaking those old habits that has to be learned first.
JC:
I loved this article. I retired in January of 2024, and since then I have had expenditure after expenditure that was previously “unplanned.”
Some have been home repairs, like replacing and upgrading my electrical panel, replacing a built in microwave, replacing a dishwasher, repair and upgrading my whole house water filter system, and on and on. None of these expenditures were foreseen, as my home is only 6 years old. Total costs…@$5,000-6,000.
Another major expenditure is for a kennel, (@$800)and then a fence for my large back yard. Wooden, 120′ X 30′ X 4′ site built, with 4 gates.($7,000) Why did I need a kennel, and then a fence? Because a puppy showed up in my front yard on the Friday evening of this past Labor Day. She had a slight limp and “road rash” on her left cheek. We suspect that some as_hole threw her pout of a car near our drive way. (We live on 6 wooded acres in a semi rural area.) Of course, we also had Vet bills for shots and spaying and heart worm treatments, etc.
We did not have a fenced yard, so the only place we had to keep her was in our garage or in our yard, on a lead fixed to the ground. I had planned to get a dog in a couple of years, when we had finished the majority of our traveling in retirement, but… Of course, we also had Vet bills for shots and spaying and heart worm treatments, etc. another $600.
But she is such a sweet dog and she never stops wagging her tail.
My wife and I have always been “cat people,” and although we both had dogs in our families as children, just never had one in our 50 years (so far) marriage. In fact, in the past 18 months, we have fostered 27 kittens and 4 adult cats, and we regularly feed 3-4 ferrels as well. A friend of ours is involved in a TNR (Trap Neuter Release) program in our community, and we have been volunteers to help with all the kittens born from un “Fixed” cats. We keep them and care for them until they are old enough to be “fixed” and then for an additional 3-4 weeks, until they can be put up for adoption.
I imagine that in additional to the charitable donation I give the clinic annually ($2,000) we probably spend $300-$400 a month on cat food and other cat related items.
Since my wife and I have no human grandchildren, we feel like these fur babies are our substitute.
In a funny way, I guess caring for animals has become somewhat of a “purpose,” which all the books on retirement say you need to have for a successful retirement. For those readers who were raised Catholic, we feel that maybe St. Francis is putting these animals in our lives to help him fulfill his mission as the Patron Saints of Animals.
As I looked at your 7 enumerated ideas, I found myself saying Yep…Yep…Yep…Yep…Yep…Yep…Yep…JC is right again!
We have the ability to afford to spend the money, since we have sufficient income and investments to last our lifetimes…we have the feeling of