Changing Mindsets: From Saving and Investing to Enjoying What You've Worked Hard to Save and Invest

[MamaFej]

First and foremost: I'd like to stipulate that literally any personal concern expressed on an internet forum dedicated to cruising is a First World Problem.

 

My specific concern here is as First-Worldly as it gets. I apologize for the length of this post, but I'd really appreciate help from those with experience.

 

That said, I've been a saver since I was a young child. Indeed, when the ice cream truck would come around, and all the kids would run into their houses to grab money, I'd pull the plug from my piggy bank, look inside, and 9 of 10 times, close it back up and just wait until the other kids were done with their snacks before we started playing again.

 

All my adult life, I've penny-pinched and saved. Hubby had no savings when we met, but quickly adapted and became a saver/investor. We've maxed out pre-tax contributions since our 20s. We've put money into other investments and savings accounts with every paycheck.

 

Now, Hubby has retired (my own career ended due to family/extended family needs in the 90s). The kids are grown (youngest graduates HS in May). One has already graduated college and started his own career and retirement investments. College expenses for the younger two are covered with what we've saved and invested since they were babies. The one who just turned 21 started her own investment account at 19 and is about to open her first 401(k) now that she's old enough. 

 

All that is to say that I am very good at the saving/investing and being frugal mindset. Now that it's almost time to spend that money, I'm having a hard time. I love putting money away. The thought of actually spending it freaks me out, even though this time of our life is exactly what we've been saving it for. It is largely meant for Bucket-List style travel (the pension more than takes care of every day expenses). Thankfully, we pulled a significant chunk from two investments we've had since the 90s and put it into cash last week before the market tanked. That money is still sitting in an account, so I'm okay with it, but when it comes time to pay for next fall's travel, I might freeze. We did pull enough to also cover the taxes on gains, of course.

 

So, wise folks who have gone before us, do any of you have any tips for helping change mindsets? I know full well that the expenses for which we will use this money are exactly why we sacrificed and saved it instead of having the lifestyle our colleagues had the last 30 years. I just can't wrap my brain around the spending mindset. 

 

Any advice?

[crystalspin]

Following. dr'spin retired at the end of 2019. One difference is that he already spent on travel (although always a "good deal" or promotion). He alternates now between resigned spending and reverting to pinching pennies! But no frivolous spending! 

[MamaFej]

3 minutes ago, crystalspin said:

Following. dr'spin retired at the end of 2019. One difference is that he already spent on travel (although always a "good deal" or promotion). He alternates now between resigned spending and reverting to pinching pennies! But no frivolous spending! 

Thanks, Crystalspin. I didn't meant to imply that we hadn't traveled at all. When the kids were young, we bought a very used (previously a rental) RV and took many short trips as well as four summer-long trips all around the US and parts of Canada. We got to 49 states that way. We also flew to Hawaii for our 20th anniversary, and took the kids along for the first week. The youngest was 10 when he visited his 50th state.

 

We started cruising a few years ago, and have become hooked. So far, we've been able to do it without touching the investments (just putting less into savings than we used to). 

 

It's the spending of the investments that has me irrationally concerned. 

[SargassoPirate]

We had a hard time switching from saving to spending when we retired.  The key was to move our savings and investments into an account that is well diversified and then start pulling out just enough to zero it out in thirty years.  By then we should be done traveling.  What we pull out goes into our travel fund account and we spend off of it.  Once in a while we transfer money from our general fund into the travel fund as well.  We also take a lot of SKI trips - Spending the Kid's Inheritence.

 

We got here by being frugal all of our working life, bought a smaller house than we could afford, drive our vehicles 10-15 years, and in short - we don't spend money buying things we don't need to impress people we don't know.

 

With any luck, we'll zero out and that last check for the funeral will bounce.

[NSnJW]

Hi Donna,

I once knew a 2 brothers and a sister in their 80s who were still scrimping to the point of not buying things they needed even though they were loaded.

Just remember the government or a retirement home will be glad to deplete your savings if you don't spend anything.  If I live long enough, I intend to die broke.  I doubt I will live that long but I intend to enjoy some of what my wife and I saved for.  She only lived for 4 years after I retired and was gone less than 4 months after we found she was sick.  There are no guarantees.  Plan for the future but live for now. 

[MamaFej]

@SargassoPirate, we have very similar philosophies. Our newest vehicle is 5 years old, and it replaced a 17 year-old one whose 4th transmission died (the previous three were replaced at Honda's expense, not ours). Upon retirement, our financial advisor asked if we were going to downsize. We told him that houses don't get much smaller than ours and reminded him that we didn't save $X on a public servant's salary by buying more than we need. 

 

As for SKI, we've always made it clear to the kids that our job is not to leave them an inheritance. Our job is to raise them to be independent and responsible so they won't need one. So far, so good. 

 

We've also figured out what we can take out of the investments and move into the travel account on a yearly basis. 

 

Thank you very much for your insight.

[bennybear]

It is very difficult to change this mindset.   We too fund a travel account for yearly travel. We also find that interest from a large investment funds a yearly long winter trip.  

 

We have always travelled as I lost a brother very young and realized that this is it.  But lately I am not so budget oriented,  we now prefer four star hotels, business or premium economy flights although mostly on points and the odd upgrade to a suite on a cruise.  

 

I do see friends who have more than we do still being very frugal.  At some point you might as well enjoy what you have and not worry so much about the pennies.  Although I will never waste money.  IMO making memories and sharing experiences is what life is all about.

Edited March 4, 2020 by bennybear

[MamaFej]

1 hour ago, NSnJW said:

Hi Donna,

I once knew a 2 brothers and a sister in their 80s who were still scrimping to the point of not buying things they needed even though they were loaded.

Just remember the government or a retirement home will be glad to deplete your savings if you don't spend anything.  If I live long enough, I intend to die broke.  I doubt I will live that long but I intend to enjoy some of what my wife and I saved for.  She only lived for 4 years after I retired and was gone less than 4 months after we found she was sick.  There are no guarantees.  Plan for the future but live for now. 

Thank you, @NSnJW! My dad (78) is too frugal (except for golf) and is still putting money away with each pension check. We keep trying to convince him to travel, but he won't. He's very concerned because he will likely need to be in an Alzheimer's care facility (his mom and sister died from it, his brother is in a facility, and he has the same genetic markers) and he fears being a financial burden on us kids. However, he owns his house outright and it could pay for a top-notch facility for 20 years, more than he would need. 

 

I keep telling him that there's no prize for entering a nursing home with the biggest bank balance. My surviving brother and I would much prefer to see him travel and enjoy the cognizant years he has left than to inherit anything at all. 

 

I am sorry you and your wife only got four years of retirement together. I hope you created wonderful memories during that time. I also hope that you thoroughly enjoy the nest egg you built together and that you do die broke a very long time from now. 

 

Thank you for your advice. 

 

 

 

[MamaFej]

7 minutes ago, bennybear said:

It is very difficult to change this mindset.   We too fund a travel account for yearly travel. We also find that interest from a large investment funds a yearly long winter trip.  

 

We have always travelled as I lost a brother very young and realized that this is it.  But lately I am not so budget oriented,  we now prefer four star hotels, business or premium economy flights although mostly on points and the odd upgrade to a suite on a cruise.  

 

I do see friends who have more than we do still being very frugal.  At some point you might as well enjoy what you have and not worry so much about the pennies.  Although I will never waste money.  IMO making memories and sharing experiences is what life is all about.

Thank you, @bennybear, especially for acknowledging the difficulty of changing the mindset. I absolutely get it logically, but I am a saver by nature, and it's hard to change.

 

My brother died at 25.I have since felt the need to experience some of the things he didn't get to. I really felt a connection to him when I stood on what used to be the Berlin wall, knowing that he had been there when it was standing, and died less than two years before it came down. 

 

We will also not waste money, but will strive to make memories and share experiences. I am grateful for your input.

[bennybear]

I think that is the hardest to overcome,   I didn’t have a new car until in my 50s.   It just wasn’t the priority for me vs travelling.   I lost my brother at 30 so I do understand how life changing it is.   

I always say that everything is about how to save for retirement, not how to Spend it.  But I realize we can afford to treat ourselves a bit,  as at the end of the day it won’t make much of a difference.   All I can add is to go and enjoy yourself while you can, because life can change on a dime.   And hopefully some good memories will help sustain you.

[chipmaster]

Do what you love and love what you do, then nothing ends.

 

Too many people see work as something they tolerate for the vacations or for someday retiring.  If you come to love your work then you do what you love.  My dad took forced retirement and was never the same after it, he had joy in teaching but that didnt' last long.  My mom did what she loved ( or at least said so ) and didn't retire till she was 82, to be honest that transition is / was hard.  

 

As to what to do when you transition, like all things in life you can't go cold turkey on habit, anyone who thinks when they retire it will change 180 degrees is in for a nasty surprise.

 

Successfully people don't retire, they do gradual life change, best is if retirement isn't any different then when working do what you love, love what you do, and when you retire it's a transition from one love to another.  Nobody can flip the switch on hobbies, habits or love.

 

As to spending during retirement, perhaps you are looking at it all wrong, spend like you did when yo worked.  If you saved enough you should be able to support it, you dont' need to "spend" more spend the same, enjoy those vacation, meals out etc. the same, you ramp them up, they lose their meaning.

 

[SargassoPirate]

18 hours ago, MamaFej said:

@SargassoPirate, we have very similar philosophies. Our newest vehicle is 5 years old, and it replaced a 17 year-old one whose 4th transmission died (the previous three were replaced at Honda's expense, not ours). Upon retirement, our financial advisor asked if we were going to downsize. We told him that houses don't get much smaller than ours and reminded him that we didn't save $X on a public servant's salary by buying more than we need. 

 

As for SKI, we've always made it clear to the kids that our job is not to leave them an inheritance. Our job is to raise them to be independent and responsible so they won't need one. So far, so good. 

 

We've also figured out what we can take out of the investments and move into the travel account on a yearly basis. 

 

Thank you very much for your insight.

 

You're welcome.  

 

We too have told our kids that being of sound mind, we plan to spend it all.  The apple don't fall to far from the tree and both of them are of like mind.  Our son still drives the first car he ever bought in 1999.

 

I have a 57 year old car that I bought with some of our savings and it's appreciating in value faster than our investment accounts.

 

One more thought.  We bucked coventional wisdom and the advice of our financial planner and started drawing Social Security  as soon as we could.  That goes into the travel fund account also.  I put the pencil to it and figured that the break even point between a smaller check now and a larger check later was age 79.  The Social Security acturial tables have us with a life expectancy of around 82.  We'd rather spend it now.

 

Safe and happy travels!

[iancal]

Travel is our number one expense.  Could be a cruise, a six star resort. Or a small family run boutique hotel or B&B.

 

It was a challenging tradition.  Took all of a few months.  Experiences now trump things for us.

 

We do not want to be the richest people in the retirement home, sitting in a rocking chair wishing we had not done this or that or travelled here or there.

[ColeThornton]

I'm glad to see I'm not alone in this.  I just turned 60 and I retired at 52 after spending 21 years in the Navy and then a second career as a D.O.D. contractor.   Like the O.P I was always "thrifty" also and did well to prepare for retirement.

 

So, I figure in my 60's I'm going to start spending some and enjoy life even more.  I decided to finally fly First Class to Miami and go on a cruise and figured that would be a nice chunk of cash.  However, I got a couple of great deals and I'm not hardly spending anything!  Round trip in First only cost me $700 from here in the deep Midwest and I got a solo cabin on NCL for only $600 with a bunch of really good perks.

 

Next time I'll try harder to spend more.  🙂

[EasyGoingGuy]

This is basically the story of my life (68 now). As the child of a 'depression child' (we never had much money) frugality was just a way of life. When I started get decent jobs as a young guy I preferred to see my savings account increase rather than going into hock for anything (I've always hated 'payments' and paid things off as quickly a possible). Later, with the 'good' job I always tried to maximize IRA's then the 401-k.  One year my wife actually asked if we could keep a raise I'd gotten instead of increasing the contribution to the 401-k.  Anyway... retired 5 years ago and no switch went off in my head that it was now time to SPEND. It basically took me 4 years of small steps seeing that the money coming out of the savings was significantly more than we were spending (although a move back to CA helped reduce the 'pot' significantly) and that there was really no sane reason worry about money TOO much (although of course I still do somewhat). We now cruise Oceania instead of Norwegian, I don't worry about what I order in restaurants, bought that new techy TV, replaced a fridg even though it wasn't broken, fly Business class occasionaly... still working on replacing our 10 year old car (hey, it still works great).  So, bottom line, small steps, look at your cash flow and make age/time decisions based on your situation. And have some fun with that money (and don't forget giving to charities and making your kid's life a little easier).  No one gets a prize for having the most money when they pass on.  Definately a 1st world problem, but that is where we live.

Edited March 9, 2020 by EasyGoingGuy
added information

[CruisingAlong4Now]

I too have a problem going from savings mode to spending mode.  However, I am an analytical person and ran several computer models that forecast asset growth, expenses, and taxes.  After running several iterations with different levels of spending and earnings forecasts, I am finally convinced I can spend money and not outlive my assets.  Many of the mutual fund companies have asset planning and retiree spending models on their websites that are free to use.  Fidelity has a fairly robust model that asks you to define your retirement needs and wants.  T. Rowe Price has a more simplistic model that is can provide some reassurance.

 

May I also suggest a longevity annuity to provide income during your later years.  Typically these will start paying monthly benefits at age 80 (or later) and pay for the rest of your life.  Since running out of money before dying is a concern, these annuities ensure that won't happen.  If you know that there is an annuity waiting at a later age that will pay for your needed expenses towards the end of life, you may be more willing to spend money now.  If effect, you are dividing your money into Now and Later. Some pros and cons: https://www.blueprintincome.com/resources/retirement-income/longevity-annuities/pros-cons-longevity-annuity/

 

Edited March 10, 2020 by CruisingAlong4Now

[LoriPhil]

So nice to know others have the same feelings.  Loved investing the max in 401k and individual Roth’s for years, with a cash yikes fund as a cushion for the unexpected.  We do fly business on our rare flights so the trip is an experience from the start, but also drive our cars until the point of failure (replaced our beloved 1990 Honda with a Subaru Outback which should last for a long time too).  Darling sister died unexpectedly at 58 which triggered our Baltic cruise and now at 66 I’m newly retired and hoping for more travel as soon as the dust settles a bit on the cruising scene.

[LoriPhil]

But I AM refusing to look at our investments right now, as it would just lead to a case of the vapors, and you don’t lose until unless you sell.  Happy the mandatory distributions are pushed back until 72 though...

[Clay Clayton]

Like you, it was a difficult mindset to change for us. It was helped by seeing that  (thanks to the last two years of the bull market) that we had more assets two years after retiring than we did on our last day of work.  Unfortunately that all changes with COVID and the bear market but hopefully we have enough to weather this storm and in a few years will be more comfortable again that we won’t run out of money.  
 

The other thing that helped us make the switch from savers to spenders but setting a budget and tracking it every month.  I had done a straight line calculation of spending down our assets and it showed we were good until we were both over a hundred.  With the current level of our portfolio, it’s probably closer to 90 but seeing that we were able to survive (and quite well-see my blog) gave us the confidence to not beat ourselves up about spending the money.  
 

Lastly, rather than getting pleasure by figuring out how to increase our savings and the best investments for them the way we used to, we now enjoy figuring out the best plan for us to spend them down. Of course, we also are pretty frugal-we had initially planned on sailing RC to Europe this spring until we got a deal on Viking that brought the price to within $10 per person per day-we jumped at that. Yes it was an additional $300 but so worth it.  Especially when the ship turned around halfway there. 

 

Good Luck and congratulations on your retirement! 

[iancal]

The one single habit that followed us into retirement was value. We place value ahead of price  when we travel.  Value is a function of our personal preferences. 

 

 On our winter trip this year we stayed in one place for a week even though we only booked for three nights.  It was $35. per night.  Same at another.  It was $70.  And we stayed at 2 others, each for $230-260 per night.   We liked each of them as much as the other...for different reasons of course.

 

Same for cruise lines/ships and any other travel product.  

[bennybear]

Sadly, I see people who will only spend based on a good deal.  They only see the cost and miss out on experiences.  We all only have limited time, and especially now I am not sorry for any travel experiences.  While we will never waste money,  we have enjoyed business class travel, some ship suites and even renting a Ferrari in Italy.  As I get older I find I appreciate a few more creature comforts.  Here’s to enjoying what we have worked so hard for and saved for.

[iancal]

We are spending our money on experiences rather than things. And when we go we go for 7-9 weeks.  Not going to fly for 10-23 hours just to come back in a few weeks.

 

We are finding that we enjoy slower travel independent land trips to cruises these days.   The last trip had four  stops at 5-9 days each plus a few 3 and 4 day stops.  We get tired of the same cabin, the same food after a  10 days on a cruise ship.  We still keep our eye out for late booking cruises during these trips but we find ourselves increasingly ambivalent about booking.  Could be that we have had enough or perhaps the decrease in  the quality of the offering has termpered our enthusiasm.  We love the ocean so our land vacations always have the majority of time spent within a stones throw of an ocean or a sea.

 

Edited May 5, 2020 by iancal

[Clay Clayton]

34 minutes ago, iancal said:

Not going to fly for 10-23 hours just to come back in a few weeks.

 

 

That’s why we find ourselves using cruise ships as replacements for the long haul flights. Like you we love spending more time destinations.  We like learning how to live like a local.  
 

[bennybear]

This past year we were fortunate to have a number of longer trips.   We live for a couple of months in Hawaii,  then 5 weeks in Japan and 7 weeks in Europe.  The last two were combined with a cruise.  For us it’s the best of both worlds,  the adventure of somewhere  new on our own followed by being home on a ship. We do like how easy cruising makes it to visit so many places,  easily without  spending time getting there.   We find moving from place to place can be tiring.   We actually find five weeks about perfect except for Hawaii😎

 

We still very much like being at sea,  we have tried many different lines, different ships and different staterooms and still find it very enjoyable.   In fact we have done several long cruises over 20 days, and could happily do even longer. Hoping for a small ship experience in French Polynesia and an inaugural voyage.    But especially now who knows in the future?  

Edited May 6, 2020 by bennybear

[MamaFej]

OP here.

 

We were really looking forward to the long trips. Our youngest will have his social distancing walk across the stage today, with the videos of all graduates edited to be streamed on the night the original graduation ceremony was scheduled. With him starting college in the fall, we had a 10 week trip planned, mostly cruising, starting in Vancouver, lots of time in Asia, and ending in Sydney in early December. We were to come home for the holidays, then head back to Sydney for a 12 week trip of cruising the South Pacific and land time (including 3 weeks in a  camper van in New Zealand), ending with a ten day small ship cruise around Tahiti and a 14 day cruise to San Francisco via Hawaii. We would get home shortly before our daughter's college graduation.

 

It was spending the money on these two trips that prompted me to start this thread, and I truly appreciate the good guidance I've gotten from many of you.

 

At this point, I will be very surprised if the first trip happens. I am still hopeful that the 2021 trip could happen.