My father spent much of his life working two jobs, running a bar in New York. He is retired now; he is in his late seventies. He will be going to Italy for a holiday with my brother’s family.
The Real Reason Why i told my Dad to spend More Money
He doesn’t really like to travel, and he especially doesn’t care for long flights. As we discussed the travel arrangements, I gave him some surprising financial advice: fly first-class.
Although our country certainly has a spending problem – evidenced by the trillion dollars of credit card debt – many retirees like my dad have a different problem.
After decades of saving and investing and working hard, it’s not easy to spend down assets in retirement. Transitioning from being a saver to a spender is not easy, but here are three reasons why I encouraged my dad to spend more on this trip:
New Experiences
My dad has never flown first class, and if one can afford new experiences, especially when in his 70s, it’s worth it. Be it an upgraded plane ticket, an African safari, swimming with dolphins, or any other item on a bucket list, such things are truly priceless.
Inheritances
After decades of living below your means to ensure a stable financial retirement, most likely you will have to adjust your spending habits in retirement—maybe even live above your means.
As they say, “You can’t take it with you,” and indeed, projections show that Millennials and Generation X are going to inherit $70 trillion from the Baby Boomers over the next two decades. At best, I’d rather have my dad enjoy the first-class ticket now than do so later when I inherit the money.
Time
Whereas the ability to pay for convenience is a luxury, if one has the means, why not invest in it? For instance, if you abhor household chores—cleaning or mowing the lawn—and you do have the means to outsource these tasks, then go ahead and do so.
It’s essential to be intentional with your spending, but it is significantly more in retirement when time becomes more limited. For my father’s case, it won’t actually save him much time to go first class, but it sure could make a total difference of comfort during an eight-hour flight. Every hour counts when there are fewer left.
Ultimately, it is spending money with a purpose that brings balance into a person’s financial life. But going from saver to spender in retirement isn’t easy. Will my dad ever listen to me? Maybe not right now, but I hope our conversation encourages him to start enjoying the products of his sweat while he still can.
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