Happy Monday, friends! We’re taking a deep breath after doing our taxes this past weekend and learning that we owe big time — nothing bad, no penalties, just a big federal tax bill, mitigated ever so slightly by a small state refund. It’s a great reminder for us that we like having not just an emergency fund, but also a more accessible life happens fund. That fund is going to get us through this not insignificant financial hit with minimal pain — no small thing. Big high five (or big sigh of relief?) to our younger selves for setting that up! And now on to today’s topic…
The Return of the Sliding Doors
Recently, on a work trip, I had another one of those sliding doors experiences — seeing people living the type of life that we could be leading if we’d stayed in the city and decided that we didn’t mind working longer than we plan to. People dining out at expensive restaurants, going to fancy yoga classes, getting cold-pressed juice as an everyday thing. And I’m not going to lie — I felt a tiny pang of I want that. Just a tiny pang, but a pang nonetheless. I didn’t envy their nice cars or even their rather spectacular, modern homes, but just the things they get to do.
But it made us wonder: How many of us who are saving for early retirement would happily spend more if we had more to spend? If spending more wouldn’t derail our plans?
What do you think? If you didn’t have an early exit planned, would you splurge more, or would you stick to your minimal spending plan? Or even if you did have that exit planned, but had more to spend, and could splurge without setting back your timeline?
There are clearly those in life who enjoy being frugal, who appreciate efficiency and loathe waste. Who are generally averse to splurging, and are happiest when not spending or spending minimally. According to the Millionaire Next Door, one of the best books of the personal finance canon, and a great book for changing your mindset about what it means to be rich and what it takes to get there, those who are naturally frugal are more likely to get and stay rich than those who spend more freely.
But then there are those who are comfortable with spending. I’m not even talking about overspending, which is obviously bad, but more of the value-neutral spending that you can afford, but which diminishes your saving ability. These people value generosity, don’t hesitate to spend out to have a good time and are happy to do something nice for loved ones. Those who will happily pay for experiences, even if they don’t care so much about acquiring things.
If you’ve been reading here for long, you already know we fall into the latter camp. We value experiences over things, but we also want All The Experiences. (And we’ve already had tons of them, for which we’re super grateful.) But we want to see and do and touch and taste and feel and hear and every other possible sense, all the time. There are a thousand ways to have those experiences, and they don’t have to involve $20-a-class yoga or $12-a-glass juice, but that life I peeked in on sure looked tempting.. if you’re willing to pay for it.
Are We Cut Out for Early Retirement?
Usually, we’re on the same page, and so I use the royal “we” to describe our shared mindset. But on this question, it’s worth making the distinction.
Mr. ONL is probably already in the right head space for early retirement. He is happy to splurge on a good meal, but he doesn’t need anything fancy to be happy. The only stuff he ever wants is better skis, or fatter mountain bike tires, but mostly he’s happy doing free stuff — skinning up a mountain to get some free backcountry ski laps, or bombing down some curvy mountain bike course. Most of his clothes date back from before we met 12 years ago, and he has no problems couch-surfing when traveling. But, he also doesn’t know what things should cost, or what represents a good value, and whenever he does the shopping, we end up with some overpriced items in the bag. That’s fixable, though.
On my side of things, I do wonder if I’m cut out for early retirement and the small budget that goes with it. (I’m definitely cut out for the not working part.) I do not give one flip about name brands or luxury things, so I’m not at all worried about not being able to buy stuff, or not being able to prance around like a well-heeled rich person. But I do like to be able to see something that looks awesome and then go do that thing. I’m impatient, and I don’t like walking away from things that seem fun. I sometimes wonder if early retirement will mean saying “no” too much of the time, and if that will frustrate me.
Fortunately, our actual spending even now in our highest earning years is already in a low enough range that all we have to do is sustain it in retirement, and we’ll be fine. But we’re losing a lot of subsidized work benefits like my new iPhone, dinners out, coffeehouse lattes and, yes, cold-pressed juice. ;-)
Would We Spend More If We Could?
So back to the question we posed at the beginning: Would we spend more if we had more to spend? In our case, the answer without hesitation is YES! We’ll be able to travel the world once we’re retired, but we’ll be doing it dirtbag style. The way we think about it is, Why wouldn’t we travel with a nicer level of accommodations if we could? Why force ourselves to choose between option A and option B when we could do both?
If I had to pick my single favorite thing to do out of every possible choice in the world, I’d probably say try new restaurants. Sadly, that can get expensive fast, so it’s not the most compatible with an early retirement lifestyle. But if we had more to spend, you can for sure bet we’d be trying a lot more restaurants in a lot more places, plus traveling to those places, which all adds up.
So tell us: Would you splurge if you could without consequence, or do you find joy in “enough” and in being naturally frugal, regardless of how much you have to spend? We’d love to hear from you!