Last year at a home and garden show, as I walked through an RV on display, a sales rep started his pitch to get me to buy one.
I laughed, saying, “Only if I want to be a bag lady when I’m ninety and I don’t.”
He said, “Well, that’s a pretty funny answer. Don’t think I’ve heard that one before.”
Though I’m the one who made the joke, in truth, I didn’t see anything funny about it. While I have enough money to be comfortable in retirement, doing some fun things on this part of my journey, I don’t have enough for frivolity on a big-ticket item, especially one which will depreciate with time.
We all know money does not buy retirement happiness anymore than it buys happiness at any other time in our lives. But, it sure does help. When I talk to most retirees about money, their largest concern is outliving their money. I certainly get that.
All of us have emotional buttons when it comes to money _ negative ones like jealousy, fear, depression, anxiety, even anger or positive ones like stability, empowerment, enjoyment. Whether or not we have money in retirement or the money to retire in the first place probably depends upon our relationship with money over our lifetime thus far. Yes, we all have a relationship with money.
My relationship with money has a checkered past. I grew up in a household without a lot of money, one of the reasons I like a fully stocked pantry. It’s a security blanket for me. So is having money in reserve. But, I didn’t learn that until after a lot of years in banking watching and listening to a lot of people about their relationships with money.
Referring to that relationship, Will Smith once said, “Too many people spend money they have not earned to buy things they do not want to impress people they do not like.”
Ain’t that the truth! Impressing the neighbors, friends and family, complete strangers, keeping up with the Joneses? Retirement or nearing retirement is not a time to continue any unhealthy relationships with money. If you haven’t figured it out already, now is the time to zero in on your emotional relationship with money, so it doesn’t derail your retirement or plans to retire.
Fortunately, along with my banking lessons, I had mentors, who had money, who talked to their employees about money. I came to understand that money is nothing more than a tool in life. It costs money to live and it makes life easier, but it is not the money which brings happiness. That comes from having a good family, good friends, good health, a spiritual connection and, of course, meaning and purpose for your life. Money is simply the tool, which can keep that good life humming along.
The flip side of spending, spending, spending is hoarding money. If you are not spending on something you truly, truly would enjoy, not because you don’t have the money, but because you are afraid to spend the money, that can also show a problematic relationship. Striking a balance between the two extremes yields a healthier relationship with money as well as life itself. We also want to have some retirement fun!
Martin and I still have a budget AND we still give ourselves an allowance. We still call it our “blow money” meaning we can blow it on whatever we want, no holds barred, no negative comments from the other about what it was spent on. The feelings of empowerment and enjoyment derived from this freedom while maintaining our financial stability should not be underrated.
I worked hard to reach my retirement goal. The reason I strived to save enough to retire is so I wouldn’t have to work to pay for a roof over my head or food on the table. Money is the tool that gave me the freedom to do what I want with my days. Finding meaning and purpose in my life has had more impact on my happiness in retirement than any amount of money.
My feeling of security derived from having money in reserve is a positive emotion about money. Had I purchased the RV, jeopardizing my future security, I undoubtedly would have felt negative emotions _ angry with myself, depressed, fearful. Understanding why we are spending money or not spending it, what emotions the spending triggers in us, goes a long way in helping us make informed and, hopefully, wise choices in retirement.
Kathy's Retirement Blog 
Great post! This is a topic I would love to see you write more about. Each of us has a different relationship with money, and as you pointed out, a lot of our emotions about money come from the way we grew up. It would be a good idea for anyone to sit down and write an essay about why we feel as we do about money. You have inspired me today!
Rin
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Hi Kathy, I grew up extremely poor and as a result learn how to save and manage on very limited funds. Learning the value of money and saving has been a valuable experience through out my life.
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My husband and I have the same feelings about the use of our money in retirement. Although we would love to spend on a new camper, various trips throughout the year and renovating our house; we know that is just not in the cards logically. What we have done is sat down and made a plan for our retirement spending. We have tried to balance the logical (paying off the house, buying groceries once a month, renovating only when it is necessary, etc.) with the fun (2 trips each year that include visiting son across the country and 1 fun vacation for ourselves, dinner and a movie once a month and a lot of freebies-walks, museums, scenic rides, etc.)
This has been our plan for the last 2 years and we have been enjoying our retirement a lot more than we thought we would.
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Kathy, we have very similar feelings about money. I believe that people grow up learning to fit one of two profiles – either spenders or savers. The spenders are the ones who like the thrill of shopping and accumulation of stuff. The savers (not hoarders) are the ones that prefer to have a safety net. I think we both are savers, with just enough savvy to understand that you’ve gotta live, too! I read a great quote on one of the early retirement blogs (sorry, I don’t remember which one). They said, “Every time I see a Mercedes pass me on the street, I think, ‘Delayed retirement…how sad!” Made me chuckle!
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This is a very balanced and wise post, Kathy. Thanks for sharing these insights.
Donna
http://www.retirementreflections.com
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Agree that we have many tricky relationships with $. As my dear mother used to say- “If I only knew how long I was going to live”. As with many emotionally charged areas of life- dieting, exercise, having fun, financial planning- it’s all about balance. Thanks for the good advice. And I like the idea of “blow money”.
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kathy, I love your insights into relationship with money and the balance between spending and hoarding! I often get the Bag Lady fear, especially as I retired early and (hopefully) have a long retirement to support financially. But I also enjoy things/experiences money allows…dinners out, traveling, the theater. I’ve been reading quite a bit about emotions, so your comments about what emotion is created when spending resonated with me. I will use that more often, more consciously. Right now, I do know money has given me freedom, the security to explore and figure out how to live. And that is a hugely positive feeling!
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Great post Kathy on such an important topic and not just for retirees! The earlier in life that we can understand our relationship with money and work to improve that relationship the better off we will be. It is an incredibly important issue for couple to work on together too, often one is more comfortable with money than the other. We have found that the more confident partner can take the other on a successful journey towards empowerment. I love your idea of blow money too 🙂
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Like many of our generation, I am a grandchild of the Great Depression. Both my parents suffered from hardship as children and teenagers during the depression, and we grew up with the cautionary tales from that experience. I learned the habit of budgeting from them, along with the rule of saving for a big purchase before you buy it. I think many people who don’t budget see a budget as too constraining, not allowing them to spend. But I see it as giving me permission to spend without being fearful of spending too much.
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Well said, Kathy! I agree that it’s very very important to have your money – and its limits – figured out and planned out before you retire. Retirement is such a gift, such a blessing that you don’t want to ruin it by mis-handling whatever few monies you have.
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We portion some of our annual spending each year with what we call “Sunshine Funds”. Like your “blow money” – this is our individual, annual allowance to go spend on discretionary purchases. Works for us!
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Good points! Glad I found you here.
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Giving finance advice is absolutely key, we have a lot of debt in this country; without mortgages and car finance included.
Cheers,
Karen
http://tinyurl.com/j4nuln5
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This is amazing! Money is such a tough thing to maintain a positive relationship with but it was so wonderful to see how you’re doing it so well!
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Thanks! When I learned money was simply a tool we use in life like a computer or a washing machine, it took on an entirely different meaning for me. I was taught that concept in my thirties by the president of a company I worked for. He tried to teach it to all his employees at staff meetings. One of the reasons we have such a difficult relationship with money as a society is because we don’t formally educate children about money throughout the formative years. It’s hit or miss depending on their parents’ relationship with money.
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