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Man, I’m neck-deep in wedding season right now. I’ve got two biological daughters, but thanks to life’s plot twists, three other young women have adopted me as their surrogate dad. I bought a wedding dress for one of them this past spring, she looked absolutely stunning, by the way.
Now one of my actual daughters just dropped a wedding date on me, and my other two surrogate daughters are also marching down the aisle. The damage? Four wedding dresses in twelve months. Add in multiple new wedding outfits for my wife Suzie, and that’s enough to stress most budgets. My coordinated ties might be what finally breaks the bank.
At this rate, I’m going to need a frequent buyer card at the bridal shop. So, other than looking for sympathy, why am I sharing this? It’s simple: I’m trying to illustrate that life happens and spending can be unpredictable and very lumpy.
When you’re planning out that perfect retirement spreadsheet, with all its precise calculations and cashflow summaries, remember this poor Irish guy being blindsided by wedding Armageddon. Expenses happen. For your own safety and sanity, build in a spending cushion.
Don’t just pad your annual budget by 5% and call it a day. Think about the big, irregular expenses that might hit you: weddings, yes, but also home repairs, car replacements, medical surprises, or helping out family members who hit rough patches.
I’m not suggesting you need a line item for “unexpected daughter acquisitions,” but keep a separate bucket of money for life’s curveballs. Some people call it an emergency fund, others a contingency reserve. I call it my “sanity account.”
From experience, one thing I can attest to: if your retirement plan only works when everything goes exactly according to plan, you don’t actually have a plan—you have a wish list. And trust me, life’s got a wicked sense of humor when it comes to wish lists.
My ongoing close encounter with lumpy spending is painful but ultimately absorbable because of realistic budget assumptions before retiring. Stress testing your plan for large spending spikes is a vital exercise. If you haven’t done it, maybe now’s the time.
For me, I’ve learned the difference between an A-line and a Bardot-cut wedding dress without worrying too much about the prices. For you, it might mean the difference between a replacement HVAC system and tinkering around the edges of your old one for another year.
Budgets matter. Keep it realistic, not a pipe dream.
It’s definitely smart financial planning to plan for lumpy, unexpected expenses. On the other hand, it is also smart financial planning to provide a license to spend in retirement.
Mark, you have made the point I have been trying to make on HD for years. I wrote an article for HD five years ago on a similar topic.
You need to plan for the “what ifs” in life and especially in retirement where do-overs are more difficult. To me that means not cutting assumptions to close and not relying on a “we will be alright” optimistic budget. You have to plan beyond things going as planned or assumed.
I see this as especially true for early retirees.
I’m completely with you on maintaining a substantial emergency fund and living below your means—ideally with some reliable fixed income backing you up. I’ve been hit with too many nasty surprises over the years not to know how fast unexpected costs can pile up. In my view, this should be a priority for most people. Forget the opportunity cost.
Aren’t the dresses for the “adopted” daughters the kind of thing an emergency fund is for? (And no, I don’t think you need two!). If you have biological daughters (or steps) surely weddings need to be planned for ahead of time, like college for American parents – although hopefully less expensive.