The Psychology Behind Spending Money in Retirement...

Here are my top 3 takeaways from my brilliant conversation with Dr Joy Lere on Episode 3 of The Humans vs Retirement Podcast

1. Spend money mindfully.

Spending money is an essential part of life, especially when it comes to retirement. It is important to be mindful of how and why we spend our money, as it can have a huge impact on our financial wellbeing and our overall happiness.

While it may seem simple to just spend money, it is actually quite complicated.

Our spending decisions are based on a variety of factors, from our emotional state to our financial goals. It is important to take the time to understand our motivations for spending, as it can be easy to fall into patterns of overspending, underspending and spending on things we do not really need.

One way to spend money mindfully is to create a spending plan. This can help us stay on track with our spending and make sure we are using our money wisely. It can also help us to identify areas where we may be over and under spending and make adjustments accordingly.

Another way to spend money mindfully is to think about the long-term impact of our spending decisions. It is important to think about how our spending decisions will affect us in the future, as well as how they will affect our financial goals. For example, if we are considering buying a new car, we should consider how long we plan to keep it, how much it will cost to maintain, and how much it will cost us in the long run.

Finally, it is important to be aware of our emotions when it comes to spending. Our emotions can have a huge impact on our spending decisions, and it is important to be aware of how we are feeling when we are making decisions about how to spend our money. If we are feeling stressed or overwhelmed, it might be best to take a step back and think about our spending decisions more carefully.

2. Spend money with purpose.

One of the most important aspects of spending money with purpose is to think about our life span versus our health span. Life span is the number of years we are alive, while health span is the number of years, we are healthy and able to enjoy life. Unfortunately, life span is often much longer than health span, so it is important to spend money now on experiences and things that bring us joy and make us feel connected to others.

It is also important to think about how not spending money can impact our relationships. When someone is reluctant to spend their money, it can create tension and frustration in those around them. It is important to be able to empathise with those around us and understand that there may be deeper issues, such as financial anxiety or trauma, that make it difficult for them to part with their money.

Moreover, it is important to remember that spending money does not have to just be for us. We can also use our money to have a positive impact on the world and on things that are important to us. This can bring us a deep sense of joy and connection that is often overlooked.

Lastly, it is important to remember that money can be emotionally charged. For example, if someone receives an inheritance or a large sum of money from a life insurance policy, they may struggle to spend it because of the emotional attachment they have to it. In these cases, it is important to find ways to honour the memory of the person who left the money and find ways to spend it on experiences that they would have loved.

3. Prioritise experiences over things.

Retirement is a time to enjoy life and make the most of the time you have. One way to do this is to prioritise experiences over things. Research has found that experiences bring us more joy than material possessions. In retirement, it's important to make sure you're spending your money in a way that will make you happy and give you memories that will last a lifetime.

Experiences are a great way to make memories with family and friends. Going on a road trip with your closest companions or taking a cooking class with your significant other are great ways to bond and create memories that will last a lifetime. Experiences also give you the opportunity to try something new and explore the world around you.

Experiences also provide a sense of purpose and meaning. They can give us a sense of accomplishment and pride, as well as a sense of self-worth. Experiences can also help to reduce stress and anxiety and provide a sense of relaxation. Experiences are also more cost-effective than material possessions. They don't require the same amount of maintenance and upkeep, and you can often get more bang for your buck.

In retirement, it's important to prioritise experiences over things. Experiences can provide a sense of purpose, reduce stress, and create lasting memories. Experiences are also cost-effective and don't require the same amount of upkeep as material possessions. So, make sure to prioritise experiences that you'll remember for years to come.