🎁If You can’t Spend Now You’ll Never be able to and Why it’s a Bigger Problem than you think

We spend our whole lives saving for retirement. Literally. From the moment we start working, we’re already contributing to our pension and the older we get, the more money (and attention) we give to our retirement years. After all, our money’s gotta last from when we stop working (let’s say age 60) until we die. For most people, that’s around 3 decades.

This means you need to have enough money to cover you for your expenses – and your luxuries (which, btw you’ll want!) for a very long time. Who wants to go back to the workforce at 80yo?! No one in their right mind. Mind you, my great uncle worked on Wall St until the bright old age of 92! He said humans need purpose and meaning. Even in retirement. But that’s a schmooze for another day.

So, to fund your retirement (and a comfortable one at that!) you’ve gotta act frugal in your earlier years. That makes total sense. After all, financial freedom is all about giving up what you want now for something much better later on.  

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The problem of exercising one muscle, ignoring another

If we’ve spent our whole lives in saving, not spending mode, when – and more worryingly how – will we be able to make that transition from saver to spender if it’s something that’s not only totally alien to you but something you’ve shunned your entire adult life.

Spending (intentionally, that is!) is a muscle that you need to build. It doesn’t come naturally. And if you’re anything like me (a frugal 20-something who pretty much invests all she has) then you’re gonna find spending in retirement, or spending anytime really, quite difficult. I don’t want to come to retirement with pots of money and not be able to enjoy it! That would be tragic. But that’s exactly how my grandma is.

My grandma has been saving all her life. And by saving, I mean she’s a super-saver. And it’s all about her past growing up. She was born into a super-rich family. She even had her own dressmaker! She’d literally have new clothes made to her, on regular basis. But when she was 14 her father lost it all. Literally overnight. She went from living to the lap of luxury to watching her childhood home being put up for sale. She moved country and they had to start all over.

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To her, money became her form of security. It gave her comfort. Knowing that no one could ever take it away from her. She’d literally walk a mile to save £1. To me and you that probably seems nuts, and in a large part, it probably is but she saw that £1 as bringing her one step closer towards total financial independence and the security that comes with it. 

She’s now in her 80s. And do you think she’s splashing out in her golden years? Cruising? Dining out at fancy places? Going on several trips a year? No way. This was meant to be the time when she finally spends her money, after years of being so careful but for her, accumulating money was better (and more important) than spending it. So when it comes round to birthdays, she just gives her grandkids what she wished she had: money.

If you can’t spend now, you never will

This is why when saving for your retirement you’ve gotta train yourself how to spend. That when you do spend, you aren’t having buyer’s remorse (talking to myself here). 

Try spending on different things and see what you enjoy most. For me, I love buying new tech (though thankfully this isn’t a remotely regular occurrence!) and dining out. See what scratches that spending itch. It doesn’t need to be a lot of money. Try spending than 100 bucks on say, a pair of shoes or a spa day or a super-fancy restaurant (though something tells me 100$ might not stretch that far) but the key is to experiment. 

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The sooner you figure out what sort of spending you enjoy and makes you happier, the sooner you can direct a % of your salary to it and you can continue being frugal elsewhere. I know how much £1,000 of my money invested now will be worth in 10, 20 or even 40 years’ time.

That’s why I find it hard to splash out big. Because it almost seems silly. Like I’m throwing money away. But if I can’t spend now, I won’t suddenly be able to splurge when I’m 80. Because I’ll forever be with that mindset of: my money is working hard for me. It’s compounding. I don’t want to interrupt the process. 

Here’s a great story that really resonated with me: Former General Electric CEO Jack Welch once almost died of a heart attack. Years later, people asked him what was he thinking about on that hospital bed, in what could have been the end of his life.

Do you know what Welch said? “Damn it, I didn’t spend enough money,” was Welch’s response. “We all are products of our background,”

Welch said. “I didn’t have two nickels to rub together [when I was young], so I’m relatively cheap. I always bought cheap wine.” After the heart attack Welch said he “swore to God I’d never buy a bottle of wine for less than a hundred dollars. That was absolutely one of the takeaways from that experience.”

“Is that it?” Varney asks, stunned.

“That’s about it,” says Welch.

Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment