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Loosening the Purse Strings


When I first retired I was worried about my finances. Would the money we had invested and saved be enough? Since I quit work a good ten years earlier than I planned, how would we pay for everything that was to come? Would we end up in a spare room in one of our kids' homes? 

Regular blog readers know the answer: Everything worked out just fine. My financial fears lasted a few years and then slowly faded away. As we became used to our new lifestyle we understood how flexible we could become to match income to expenses. We shifted our thinking from having to doing. We saw overall expenses drop to 50% of what they had once been even as our happiness increased.

Seventeen years into our satisfying retirement journey we are wrestling with another financial question: how do we accept that is OK to spend a bit more on experiences and things that would make us happier at home? How do we give ourselves permission to spend more? How do you loosen the purse strings?

Both Betty and I are financially conservative. We aren't big risk takers (except for retiring so early!) in how we manage our money. Beginning with our first steps into the financial world we have taken baby steps in the stock market. Its tendency to overreact to emotions, innuendos, or the fear of the day, rub us the wrong way. I tend to prefer the tortoise over the hare in the child's story. I have missed many growth opportunities by following this path. But, I have lost less sleep (and money) than others who were whipped wildly up and down by the market's gyrations. 

That all brings us to today. Our IRA and investment accounts have grown since leaving the world world in 2001. Granted, a healthy part of that is from my share of my parents' estate. That gave us all sorts of breathing room. The net result is what we have been withdrawing each year is less than the accounts generate. 

One of our personal goals is to leave a decent inheritance to our daughters. Each share won't be large enough to fund their retirements, but should be an important safety net for each. I know people have different views on leaving money for their kids. The last time I wrote about this there were some none-too-subtle suggestions that adult children shouldn't get anything; we worked for the money so It was ours to spend. I accept that point of view, I just disagree. 

Another goal is to enjoy the fruits of our sacrifices earlier in life. Delayed gratification was a linchpin to our financial planning. But, importantly, that shouldn't mean, delayed forever. Never doing some of the things we dreamed about would be wrong. That would make the earlier sacrifices futile. 

Interestingly, early in our retirement when our financial situation was less secure, we went to Europe twice and spent several glorious weeks in Hawaii on two different occasions. Last summer we took a long-delayed Alaskan Cruise and loved every moment of it. The memories were tremendous and the experiences very positive. Did i worry about how much we spent? Yes.

Two months ago we decided take the big plunge and book a river cruise from Amsterdam to Basal in Switzerland. The cost will be substantial. We splurged for upgraded airline economy seating, a full balcony room on the ship, added extra days before and after the trip, as well as pricey travel and medical insurance. When I was presented with the final bill, I swallowed very hard, and said, OK.

I told myself not to think of it as a large percentage of our yearly budget, but as an investment in our lives together, something we'd look back upon as a highlight forever. With this trip, I believe I have accepted that the money we worked so hard to accumulate is there to use. We won't be foolish with our blessings, but, neither will we say no to experiences that will enrich our lives and make us happy.

As I type these words, I continue to wonder how tightly I am holding onto those purse strings.


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