Myth #16: I Need The Latest & Greatest! (part 3)

Is your current spending consistent with your most important values? Does buying those new upgrades really increase your well-being and your happiness? Is your car a status symbol or is it a means of transportation?

I have a client, Matt, who acquired a great deal of wealth in a business transaction and was able to retire. While working, he had grown accustomed to an upper-class lifestyle—big house, new car, expensive suits. Recently, he purchased a small cabin in the country and is spending more and more time there.

The last time I talked to him, he said, “You know, it’s really great out here. It doesn’t matter what I wear. It doesn’t matter that I don’t throw lavish parties. And you know, I need that baby blue Mercedes convertible sitting in my driveway like I need a hole in my head. I love it out here so much I’m going to sell my big house in town. Who needs it? I’ll get a small condo downtown and spend most of my time in the country.”

Another client, Kate, is a counselor at a local college. She recently bought a lakefront cabin. She is in love with it, and she made extensive plans to remodel the place: upgrade the bathrooms, rebuild the deck, and remodel the kitchen. Since she has been working full time, she has been unable to devote the time it takes to get all these projects done. She was also worried about how she was going to pay for all those changes.

She came in recently and said, “You know what? I’m not going to do all those things now. I’m going to wait until I’m not working, and slowly do them one at a time as I can afford them. And it will be cheaper since I’ll be able to do some of the work myself.” She is learning to live now within her means and intends to continue to do so in retirement.

Do you really need the latest upgrade? When you go to buy a washing machine and there are twelve models to choose from, do you need the one that automatically sets the water level, and has a stain treatment cycle? It’s $200 more than the one that just washes your clothes.

Do you really need your TV to show you three channels simultaneously? Do you really need the fancy satellite dish that gives you 250 channels?

I have a client who, whenever he goes to buy something, asks himself, “Can I live without this?” He is amazed by how often the answer is yes. Then he walks away without looking back.

Potentially, we have a lot more money available to us now than we will have when we retire. We spend nearly all of our income just because it is there. If we get a raise, we spend it—but we don’t need to. The key to not feeling deprived at retirement is to begin to live now the lifestyle we can sustain for the rest of our lives—to start spending less than we make.

The next time some hi-tech or expensive thing in your life breaks down, pause and ask yourself if you really need it. Maybe you can live without it. Ask yourself if it, or the other things you set out to buy or upgrade, bring you true happiness.

The happiest older people I know live within their means. So can you. You can start by resisting the automatic “buying and upgrading” urge. Start to develop a lifestyle now that you can afford for the rest of your life.

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