After retiring, there is a significant difference between occasionally splurging on nice things and wastefully spending money on unnecessary items with abandon. However, many retirees often confuse the two, becoming like penny-pinchers, saving every penny possible and hesitating to spend any money on themselves aside from essential items. In fact, even with comfortable financial conditions, up to 25% of retirees have reduced their expenses after retirement.
Managing finances diligently is crucial when you have a fixed income, but there is a wiser way to reward yourself moderately without jeopardizing financial security. It’s not just about crunching numbers; it requires a shift in mindset, breaking free from the mentality of “fear” and “scarcity.”
Retirement life doesn’t have to be extremely conservative or frugal. Here are some good reasons to splurge after retirement:
Depending on your post-retirement lifestyle, you may start paying more attention to various tech products, contemplating whether you truly need these gadgets or if there are cheaper alternatives, or even if you should just not make the purchase.
For example, if your hobbies require a laptop or a smartphone, you might consider buying the latest iPhone. However, the latest iPhone comes with a hefty price tag. While you can purchase a sturdy protective case for the iPhone to prevent drops and impacts, you still need to shell out around $1,000 to get the phone.
In the long run, if $1,000 can get you a phone that you can use for several years, it’s considered a worthwhile investment. Apple’s operating system is known to provide updates for up to about eight years, so your phone can still be functional even after that.
While you don’t necessarily have to purchase the latest and greatest tech products, opting for a higher-end product that you will use can be more beneficial. Pursuing only cheaper options may make tasks more difficult and frustrating, making saving that money pointless.
After retirement, you might spend more time at home. Investing in comfortable furniture is one of the best aspects worth splurging on because physical comfort can greatly enhance your mood.
You can evaluate the condition of the furniture in each room of your home, starting from the bedroom. Is your bed comfortable enough? Are you getting a good night’s sleep? Sometimes, all you need is a mattress topper, but if the bed itself is in poor condition, a topper won’t help much.
Start by checking the largest and most frequently used furniture in your home; if they make you uncomfortable, consider replacing them. Don’t hold onto a couch for twenty years out of reluctance to change; making your home comfortable is definitely worth the expense.
According to research data, 63% of happy retirees have hobbies. This shows a direct correlation between pursuing interests and hobbies and life satisfaction. With more time after retirement, you can pursue your hobbies free from the constraints of work schedules. In other words, retirement brings true freedom, allowing you to engage in activities you love. So, there’s no reason to deprive yourself of the right to pursue happiness.
Many hobbies are not free, even seemingly simple activities like birdwatching or hiking in nature require some investment. Birdwatching necessitates binoculars, while hiking requires good trekking shoes and clothing. The more willing you are to invest in necessary equipment, courses, or materials, the happier you can make yourself.
While money cannot buy happiness, it can create memories that you will cherish for a lifetime. For instance, you might enjoy taking your grandchildren to an amusement park or watching movies, or attending car shows or cat exhibitions.
When you refrain from participating in these activities to save money, you close the door to creating precious memories with family and friends. Moreover, when you excessively save money out of fear, you deprive yourself and others of the precious memories you could have shared.
If all your basic needs are met and spending a little extra money won’t harm your finances, why not indulge?
Prudent financial management does not mean you have to be overly frugal; it depends on the time and occasion. If your financial situation is good and you can afford the toys or tech products you desire, go ahead and buy them. If you ever get bored with something, you can always sell it online to recoup some money.
Dining out is one of the best ways to spend money in retirement because not only do you get to enjoy delicious food, but it’s also an opportunity to strengthen connections with family and friends. The average annual dining out expenditure for the typical American (not necessarily retirees) is around $3,639. If you have cut back on dining out after retirement to save money, perhaps reconsider this decision.
Food is a special experience that brings people together. When you step into a great restaurant, the food itself becomes the focus. Scientific research suggests that this might just be a chemical reaction, but food can indeed make you happy by boosting serotonin and dopamine levels. Healthy foods like chamomile tea, yogurt, dark chocolate, berries, and fatty fish can significantly improve your mood.
Do you remember the exhilarating feeling you had when you took the first bite at a nice restaurant last time? Good restaurants are everywhere, just like the moments you can get together with loved ones, but the amalgamation of both has a magical effect.
Retirement is the perfect time to try out dishes you’ve always wanted to. You are no longer bound by others’ schedules and can freely explore various cuisines that interest you. In this process, you might even discover a new favorite dish to share with your family.
Perhaps you have been frugal to ensure your family’s future security. This noble intention is undoubtedly commendable, but there’s no need to sacrifice yourself entirely for others. Leaving money for children may spark disputes, and they might end up squandering the money. Of course, you can still leave plenty for them to inherit, including money. However, if you have multiple heirs, uneven distribution of money often leads to conflicts.
While it may sound a bit selfish, the money is yours, and you are not obligated to give it to anyone, nor should anyone expect you to financially support them. In other words, you can still spend liberally after retirement while leaving a sufficient inheritance for your beneficiaries. Consult a trustworthy financial planner who can help you clarify the details and assist in budgeting. This way, you’ll know exactly how much you can comfortably spend while leaving enough for your beneficiaries.
If you do not want or need additional things after retirement, that’s perfectly fine. Not everyone feels the urge to spend money on things. Some people find great satisfaction in leading a simple life, and that’s perfectly okay. However, don’t avoid spending money solely because you have gotten used to saving or fear not being able to meet basic needs once the money runs out. As long as you are not being frivolous and it’s genuinely extra money, there’s no need to worry.
If you desire something, go ahead and spend a bit to make your retirement life happier. While money can’t buy happiness, it can certainly add more fun to life.
You can honestly assess your financial situation to determine how much you can spend on yourself and loved ones. If your current spending habits meet your basic needs and still leave you with considerable savings, then you may have more money to spend than you think. If finances are tight, significant expenses require advanced planning, but it doesn’t mean you can’t spend at all.
Start by keeping a record of your expenses, compare them with your income, and see how much surplus you have. If your savings account or net assets are steadily increasing, it indicates that you have some room to spend on things beyond basic needs. Many things can make your retirement life more fulfilling, including tech products, appliances, comfortable furniture, gourmet dining, and exploring the world outside.
Don’t spend your retirement life with a miserly attitude, reluctant to spend money. Money is meant to be spent; it’s just a tool and a medium of exchange. If you haven’t included extra expenses in your monthly budget yet, make some adjustments and buy the things you want and need, making your retirement life happier.