The people over at TicTocLife tweeted this yesterday:
In what ways do hedonic adaptation (and the hedonic treadmill) affect your path to financial independence?— TicTocLife (@TicTocLifeStory) November 15, 2020
Is there a particular area of your spending that seems more vulnerable to it?
I know ours is in foreign experiences as we crave increasingly niche travel. pic.twitter.com/wAKgUkRjZl
I started pondering the 1500 household spending, but from the viewpoint of retirement. I thought about what has changed and why.
Everyone likes to talk about travel. Post-retirement and pre-COVID, our travel definitely ramped up. However, it also became cheaper because travel itself changed. Instead of planning travel around destinations, we now plan mostly around people:
- we visited the Mad Fientist in Edinburgh
- and my friend Noonan Moose in Maine
- the Frugalwoods in Vermont
- the Physician on FIRE in Minnesota
- and the Penny Planters in Florida
And all of these fine friends happened to have a spare room for us. But, it’s not just about getting a free place to stay. I find that being in a new place is a lot more fun when you’re sharing the experience with friends. I’d rather go to an OK place with great friends than to a great place with no friends. The side-benefit is that travel is cheaper because we’re not paying for hotels and eating out constantly.
And this goes both ways. Before COVID, we had people staying with us regularly. I look forward to this once the world goes back to normal.
This is a strange one that I didn’t see coming. Prior to retirement, fixing up houses was a way to make money. Our live-in flips were a means to grow the nest egg. It wasn’t a pleasant experience mostly because I was trying to balance the work with a full-time job and two children. I had great work-work balance!
Now that I don’t have a job, I find that I enjoy building and often go way overboard on projects. It’s fun to design and build something unique and challenging. The deck and pergola I built over the summer had features I would have never attempted if I wasn’t retired. These include the fancy curve on the deck and the 25′ span of the pergola. The latter was accomplished using aluminum I-beams.
Our kitchen is a little cramped, so I’m moving a wall to push the refrigerator back.
In addition to moving the wall, I’m building a loft for our children:
These projects are expensive, but we’ll get the money back when we sell. For example, the deck and pergola were about $10,000 in materials, but if I had paid someone for the work, it would have cost at least $30,000 (labor is more expensive than materials). With some projects, it’s hard to estimate exactly how much value is added to the home, but:
- I’m confident that I will recoup the money I spent on materials
- Building makes me happy, so the price appreciation of the home is a secondary concern anyway
Other Random Spending
We have two cars and barely need one. If one died tomorrow, we wouldn’t replace it. Insurance is cheap (< 7,500-mile policy) and we’re not buying much fuel.
Sweat pants and t-shirts. If I’m feeling fancy, I’ll buy a new article of clothing from Costco.
I didn’t watch much of it before retirement and watch less of it now.
Waaaaaaay up! The Longmont library will soon construct a new wing and name if after me because I’m paying for it with late fines.
We eat out less because we have more time to cook good food at home.
This is always the elephant in the room. For now, Mindy has great health care through BiggerPockets. When she leaves, this will definitely go up.
Are You Living Right?
I’ve read articles that talk about how retirement is expensive. After all, you have to sign up for golf memberships, yacht clubs, and tickets to sporting events to fill your newfound time. I believe that the people who do this weren’t living optimally before retirement. My retirement is an expansion of everything I used to do on weekends. So now:
More building. More exercise. More walking. More reading. More contemplation.
The lesson here is to find happiness before leaving work. Live a rich life no matter what you’re doing. If you let your work define you, you’ll feel pretty empty when you leave.
How about you? If you’re retired, what do you spend money on now? Has spending increased or decreased?
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