I was reading a BudgetsAreSexy post last week about the thought of withdrawing from your nest egg after spending so many years building it up. While that thought is terrifying to me (considering I resist tapping our Emergency Fund even when we have emergency worthy expenses – it’s going to take a missing finger for me to break into that) it brought up another question:
Could we go back to a life of consumerism?
In many ways, we live a “no frills” lifestyle (compared to the average American at least), some examples that come to mind:
- We don’t go overboard on decorations, we DIY some and we have family pictures. But we don’t do a lot of the “Pier 1 Imports” type of decoration or have books on our tables just so they can be there
- We don’t buy “touristy” crap when we go on vacation
- I have had the same winter jacket for the last 4 years (Dark Grey and Black jackets are always-in-style right?)
- I don’t buy new shoes until they become dangerously slippery due to lack of tread
- Once I find a hat I like, I wear it until it becomes embarrassingly (for Mrs. AE at least) faded/tattered
- I have had the same flip flops since I was 18 years old
It looks like I am in good company, Millennial Money Man had a post last week showing some pretty sweet socks
Don’t get me wrong, we still spend money, by comparison to some of the super-duper savers out there we are not that frugal. But sometimes I glance around at what my friends and co-workers are buying and I realize we spend far, far less on non-essential things. The crazy part is, I don’t feel like we are missing out on anything.
Case in point, after I started this post one of my friends threw away a perfectly fine outdoor patio furniture cushion because it was dirty……. I told him to throw it in the washing machine and see if that would work (it would, it was dirt that splashed up from the patio) and he glanced at it, said “Nahhhh, I am just going to toss it and get a new one. Don’t tell my wife.”
Off to the garbage can he went, and at that point, I realized that people don’t think the same way I do. I would try just about anything to save a trip to the store to replace something that didn’t need replacing.
When Established Habits go Unnoticed
Our financial habits have become part of our day-to-day life. I don’t think about the money that goes into our investment accounts every 2 weeks. Mindful spending (and some judging of others spending….sorry..) is second nature now. We are used to living on less than we earn, and have honed in our spending.
Some examples:
- Whenever I go shopping, I check the price even if it has no impact on if I am going to buy the item or not
- Every time I see one of my buddies pull up in a new truck (which is shockingly often), I think of how much money they are wasting in interest and depreciation (not to mention they have absolutely no use for a truck)
- I look to fix something before thinking about replacing it
- We Find cheaper solutions to expensive problems
- I search for coupons before purchasing anything online.
I guess the point I am trying to make is, we don’t feel like we are missing out today, we are content with our spending habits now.
Will we be able to break these habits?
Down the road, when we are financially independent and don’t need to accumulate more money to live comfortably, will we still scrutinize purchases like we do today? Will we continue to get more frugal as time goes on?
The thought of sitting with a stack of cash that we saved for the purpose of spending later, but still being hesitant to spend it bothers me. I cringe a bit when I see people still working that have way more money than they will ever need.
It is hard to un-learn the impact of compound interest and the benefits of spending wisely, but at some point, I am going to have to ignore the little voice in my head that wants me to get every last mile of out of a pair of jeans and shoes.
When we hit our goals and don’t have to worry about money – will I be able to say F**k it and swipe the card on something I normally wouldn’t?
If our safe withdrawal rate is 4%, will we try to unnecessarily live on 3% because we are used to living on less? I could see myself going down this path honestly, and I guess it’s a good thing to start thinking about now.
I don’t really have an ultimate point to make here, just something that I have been thinking about time to time and want to keep in check. If you want some wisdom at the end of this rambling: Don’t give money more credit it than it deserves – it is there to serve you not be part of you.
Funny on your friends with new trucks. I’ve seen the same with some of my friends. Must be an up north thing! As I comment on this, I am boarding a plane and I look at the people in first class. I think, will I purchase first class tickets when I become financially independent? Likely not. I don’t want to break the habits that got me to FI. I want to continue to only spend money on things that truly make me happy.
Definitely and Up-North thing!
Likely a lot of what go us here will remain the same, but it would be nice to put some of our frugal habits out of mind, especially on vacations.
“If our safe withdrawal rate is 4%, will we try to unnecessarily live on 3% because we are used to living on less?” This thought bothers me more than spending more freely, saving for many years and feeling any sort of pressure would be frustrating.
I think we all judge other people so no need to apologize. I’m sure they’re judging us right back 🙂
Funny that you mention the trucks. A friend of mine has been having problems with her car and it’ll require a couple thousand dollars in repairs so she was looking at new cars. She got word that there will be layoffs at work so she texted me, asking what she should do. I recommended repairing her car until she knows she’s not impacted by layoffs, but she ended up buying a brand new SUV for $25k! So hard to bite my tongue when she texted a picture of it.
I agree that it’ll be hard to switch gears and spend the money that has taken so much work and time to accumulate. It’s the uncertainty of healthcare and nursing home expenses that has me the most worried. If I knew for sure what these would be, I’d feel better about spending money earlier in retirement (which is still 9 years away for me).
Ouch, going into debt with a potential layoff looming, probably not the wisest decision.
Yea, it’s tough to plot out those ever changing costs, I have pretty much put them out of mind because I know they will change by the time we retire.
I don’t think there’s anything wrong with questioning our consumerist tendencies. Keep fighting the power! There’s nothing wrong with being critical and educated about what you’re spending–and I think it’s important to maintain that during FIRE, too.
Definetely nothing wrong with it, just don’t want it to become a handcuff down the road later either.
I can see how it would be hard to touch that hard earned/saved money. I’m not sure how I’ll feel about that when the time comes.
Right now, I try really hard to evaluate the value I’ll get out of a purchase (and if it will become a burden or make my life easier). I’m certainly willing to spend (within reason) to make my life easier or create a lasting memory. But “stuff” usually doesn’t make the cut!
The burden test is a good one, we are definitely willing to spend, but I definitely cheap out on some areas (even though we probably don’t need to) and that can be a dangerous line
I took my GF out for breakfast this weekend since we hadn’t been out in a while. We’ve been doing fantastic not eating out for any meals. When the bill came, I about had a heart attack. I smiled, tipped the waitress and signed. My GF was very appreciative but that moment gave me pause.
Years ago, the guy I used to be went out daily, sometimes multiple times a day, never giving any consideration to the money I wasted.
Now, the exact is opposite. I’m almost not giving consideration to the money I’m saving until something like the breakfast bill came due. We’re not missing out on anything by the way we live now.
It’s easier to live with these habits than the habits I used to have.
Once I realized how much time and energy my stuff is consuming, I’ve become really intentional about not spending if I don’t have to. It’s not even about money as much (at least in the beginning) as it is freedom. But…the money saving part sure is nice too.
That is a great way to vet “things” – would save people from spending a lot of money on “hobbies” that collect dust in the garage.
It is certainly going to feel extremely odd to not be saving any more. I really like seeing my balances go up (despite the market), so it is going to be an adjustment to deal with growth only if the market is smiling upon us.
As to spending habits, I don’t think they will change much for us. The projected size of our retirement stash is a multiple of our current expenses, so by definition if we were to suddenly go crazy splurging, we would simply run out of money.
These are good points, and it’s interesting to wonder how things will change especially when you’ve been on spending/saving autopilot for years.
I’d imagine it’s because when you’re in the accumulation phase, any spending left after cutting waste is thought of as necessary or mandatory to continue your life – gas to get to work, food to eat, entertainment to unwind. After ER, a portion of those expenses become optional – sure, when you were working $60 a month in gas didn’t seem like a big deal – most of those miles were for work, errands, etc. But lets say you get the photography bug, and you discover you really like driving around and taking pictures, so you still spend $60/month in RE – except now most of that $60 is for a “hobby”.
You might spend the same amount over the course of the year, but a bigger portion might go towards things you WANT as opposed to things you NEED – which can feel spendy, wasteful, over-consumerist, whatever you want to call it. But a bigger portion on Wants is better! If you’re spending a bigger portion of your time doing what you want (instead of need), it makes sense that at least some of your money would follow suit.
Awesome post! I certainly agree that it is scary to think that we could become the hoarder of money in the future that never enjoys it. It might be true and it might not, your guess is as good as mine. But if you step back and look at your budget today you will see what is important to you today.
Also, if you aren’t spending it on stuff then I doubt you will in the future because your habits are ingrained. My guess is you will see your money spent on experiences expand at a time in the future which is what it is all about.
I’ll leave you with a thought – What was important to you ten years ago? Is that the same today and what makes you think your future self will have the same goals and desires that you do today? They will be different and you will adjust your spending accordingly to meet your happiness. Better to save a little more now so that you at least have the option in the future to make a decision. You don’t want to be in a situation where you are forced to make only one decision. Make sense?
The truck comment made me laugh! We have a mini van and a trailer. I joke that we use that trailer more often than almost anyone I know who has a truck bed. And it works great with the mini van. Same with our pop up camper. Plus our mini van can pull our pop up and still get 22 MPG down the road. #minivansforlife
It’s funny you mention the Twins hat. I have had an old ratty Twins hat for years and years that I only a week ago retired due to the fact it was falling apart and started to get a funky odor that even washing it wouldn’t get out. I replaced it with an uncharacteristically non-frugal purchase of a new Twins hat while I was at the game last week. I figure the new hat I bought was a bit more expensive, but it should last me another 7-10 years like the other one. Sometime’s it’s OK to pay a bit more for quality as it can save you more in the long run! 🙂 Granted, I likely could have saved money by buying the hat online.
When it comes down to it, our spending habits are things that we build up through behavior over time. Just as you can get into a groove with being frugal with your spending, it can be easy, especially for some personality types, to get back into a not so frugal spending pattern. You just have to know yourself, and realize when you’re beginning to stray from what’s needed.
Let your money work for you, and get the best value for your money -that’s what I say!
If you found a hat you like and its going to be a 7-10 year hat, I wouldn’t worry too much about the cost 🙂
Both great points put money to work and be a value buyer
Good read…my wife and i are in a similar situation…we save and spend smartly…but we do not live off of $5 a day either…there is some concern of when will we be able to finally “relax” and enjoy the “financial responsibility” we adhered to during theses times…
Take care,
Mike
“I have had the same flip flops since I was 18 years old”
Same here….mine are at least 10+ years old Adidas flip flops. They are still so comfortable. My wife hates them but every now and then I find her wearing them in the kitchen. What??? I also always try to fix before replace, thank goodness for YouTube videos!
It’s kind of a relief when things are broken or damaged to the point that I’d be willing to throw them out. It means that I can try any method of washing or repair I want and I can’t make it any worse! About 90% of the time the item ends up as good as new and lives to see many more days in our house.
As for splurging just because we have the money, I doubt this will happen. We weigh our options, choose “good enough,” and dedicate the rest of the funds to other causes. I’d rather fly economy and donate the extra $$$ to charity than spend it on first class seats. (Of course I wouldn’t decline a free upgrade 😉 )
The stuff that most people spend money on does nothing for their quality of life. Getting jeans because the leaves are changing colors. Paying for 8 gigs of data when some months you only use 2. Cable TV and you only watch Netflix.
Like you I feel like massive consumers compared to some of the bloggers out there but in the real world we are extremely frugal.
I don’t think you will become a lavish spender no matter how much money you have because you know it won’t do anything for happiness.
You sound a lot like Mr. Groovy and me (and the cap he wears every day makes your retired one look brand new).
We feel very rich and we don’t spend a lot. We were just talking about how even if we had $5M we wouldn’t change our day to day spending habits much. We might have another home or two and take our entire family on some kick-a** vacations, but that’s about it.
We just keep cutting and cutting and it drastically increased our savings rate over time. There’s so many ways to save (without going crazy couponing-lady-style)
I’ve found you won’t change your spending habits once you hit your retirement number. You’ll find that you actually needed LESS than you thought to retire comfortably.
A lot of folks forget to calculate that once they retire, they no longer have to save for retirement!
Sam
My husband and I currently would like to think that we would have no problem with spending the money we’ve saved for retirement once it’s time to do so. However, I’m sure there might be some hesitancy at times for the same reasons you’ve mentioned.
We actually know a couple where the guy is retired and the wife will be retiring soon. Sometimes it seems like they have no problem spending their money and other times they seem very hesitant about it, even though they have the money. I guess ultimately it’s just what they’re use to, and we might end up being the same way.