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.
Travel
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.
Building Materials
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
Autos
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.
Clothes
Sweat pants and t-shirts. If I’m feeling fancy, I’ll buy a new article of clothing from Costco.
TV
I didn’t watch much of it before retirement and watch less of it now.
Library Time
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.
Food
We eat out less because we have more time to cook good food at home.
Health Care
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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We fish more, hike more, play more tennis, run the same amount, volunteer the same amount, overseas travel more(pre&post covid), domestic road trip more. Not much difference in our spending. I agree, if you are living well before retiring you’ll just carry that into retirement. Just climbed out of the car after a 2,200 mile road trip to Virginia to glamp with two of our married kids. That kind of time flexibility was hard with a demanding job is easy now.
Virginia! That’s our neck of the woods!
Whereabouts did you settle on glamping? Shenandoah Valley area?
Enjoy!
It was a small state park, Twin Lakes, chosen because it was equidistant to our kids’ homes in Charlottesville and Norfolk. Our hiking didn’t go as planned, daughter in law broke her foot the day before the trip! But it was fun sitting around the fire catching up.
Whoah, a car trip sounds awesome right about now! We have one planned for next week. We’ll only go if we think we can do it safely, so I hope it goes off.
This is very reassuring.
I retire from teaching at the end of our school year (5 weeks to go!!)
Whoah, nice!!!
Love the curved deck with pergola! In general our spending has been the same since I left work, but this year our spending is down about 25% since we can’t travel. Hopefully you can come and crash at our place sometime once this pandemic blows over!
Mr. CK! We’re planning an East Coast trip summer of 2021 assuming the world is in a better place. It would be awesome to see y’all again!
Yes this:
More building. More exercise. More walking. More reading. More contemplation.
Life is good.
🙂
Not retired yet – but love the way you’re doing it. Travel, projects, reading are all my favorite ways to spend time – I’m glad to do more of that.
Travel here Ed!
Thanks for the shoutout!
I don’t think I’ve ever thought about traveling with a particular focus like this before:
“Instead of planning travel around destinations, we now plan mostly around people.”
I really like that idea!
Looking back, I think we’ve had a pretty even split between going to particular destinations around the globe and going to certain places WITH others.
I like the idea of planning around people. I feel like that’ll mesh well with having more time to vacation/travel and spend time with folks (rather than feeling pressured to “maximize” limited vacation time)—now that we’re in the semiretirement phase of FIRE.
Of course, we’ll need to kick this pandemic to the curb before all that’s terribly relevant…but it’s nice to dream!
PS: Great job on the construction work. I wish you could have seen me standing on a rotating bar stool in our kitchen trying to diagnose a flashing can light—that’s about as far as I got. :-p
PPS: Catch the other diagram from the post with the hedonic adaptation graph you included? The fulfillment curve is a pretty fun thought experiment to work through, too (hint: in the link below)!
Chris@TTL recently posted…Enjoy the Small Things in Life (Avoid the Connoisseur Effect)
Standing on a rotating bar stool! Ha! Watch yourself there! Did you figure it out? Sometimes LEDs flicker because they’re on the wrong kind of dimmer switch.
Y’all should definitely move to Boise…..our library doesn’t charge late fees! 🙂
Wow, this would add loads of money to our monthly budget! 🙂
See, I look at hedonic adaptation as a positive. When I tell people I spend less than $20,000 per year, the first thing they always think about is what I am doing without. But they fail to consider that I am perfectly happy in my current lifestyle. There is nothing that I think “wow, I wish I had the money to have that one thing.” I hang out with friends, work on my projects. This year I bought the most expensive guitar of my life. Occasionally I spend on music stuff or bicycle stuff. I’ve even started ordering takeout every Friday to help support our local restaurants (which, other than Netflix, is the sum total of my entertainment spending right now). Most of the spending change one makes aren’t really deprivational. I have a $25 per month phone service instead of a $75 one. I have driven the same car for six years and expect it to last well into my retirement (it’s only at about 46k miles right now). Both serve me perfectly fine and I am hedonically adapted to them. So, why would hedonic adaptation be a bad thing?
BC | FrugalWheels recently posted…The art of the thrill: Mountain biking away the worry
I’m a little more than 8 years retired. Expenses have been more or less flat the whole time except for ACA premiums which steadily creep up over time. I’m hopeful for a Public Option in the near future.
Financial Velociraptor recently posted…Bear Put Spread Stanley Black & Decker (SWK) With Yield Up To 245%
I’m with you Mr. 1500. If anything, once I retired life got cheaper. I had more time to do things myself (and do them properly I might add!)
Better meals at home, less driving around to commute, more time doing the stuff I love to do. It’s a win-win!
Mr. Tako recently posted…The Bumpy Ride Isn’t Over
What a lovely life! And some truly impressive construction projects. I hope my own retirement will be as full and as interesting as yours.
I like the idea of constructing travel plans around people. I realized a few years ago that if I keep up current patterns, I’ll only see my college buddies a dozen times before we’re all dead. Quite a sobering thought. I now plan to change this projection.
The Darwinian Doctor recently posted…The BRRRR method: how we got a 62% return on our first duplex
My life has been a little less expensive as well, except for international travel. I’m cooking more also but still have some work to do on the take-out front ? Btw, I’m amazed at your construction skills. Happy Thanksgiving to you and your family. Take care.
Brian
ah it makes me sick all these FIREs on the internet bragging about life….GCC just wrote about a fancy and exclusive club he got in…you guys lost the essence of the movement. It’s a shame, a real shame!!!
Jim. Ralph, Simon. AA. How many names do you have?
Also, what are you talking about? Who’s bragging?
Also, I don’t own a Tesla.
Go away.