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Thanks. I was assuming no "credit cards" to be no plastic or electronic means of payments at all. I was picturing someone walking around with cash all the time and using money orders. Because to me, I don't carry a balance on credit cards so I don't see a use for debt cards, since I'd prefer the money to sit there longer and earn whatever interest it can than to hand it over as soon as possible. At least when interest rates were higher it mattered more.
When my time comes to retire, I think I will be the opposite, I will be frugal, until I am well into retirement. I won`t be able to spend, if I am not working. I hope that will change as time goes on
That's my thinking to, simply because no matter how much we plan there can be unexpected events in our lives which go along with unexpected expenses.
I remember my first job out of college, I saved constantly before buying anything that wasn't critical.
Managing spending early in retirement can be a challenge. Increased free time can translate into increased opportunity to spend. We are encouraged to do so. Many make their living off of getting others in debt and collecting the interest.
Managing spending early in retirement can be a challenge. Increased free time can translate into increased opportunity to spend. We are encouraged to do so. Many make their living off of getting others in debt and collecting the interest.
I think besides mindset it has to do with your hobbies too. If you prefer going to the public library and spending an afternoon there instead of going to the shopping mall to look at materials things to buy, that's going to influence you too.
I know for us, the vast majority of our free time is spent on things we really enjoy that don't cost money or very little. People with expensive habits are going to have to be very careful or plan for it in the budget.
Another thing my Financial Advisor said he has observed is that people tend to spend their time in retirement how they were in their working life. He said he has rarely seen someone who has never traveled much spending all their retirement time on ship cruises. Likewise, those who get on a plane to go someplace every free moment they have tend to continue to do so in retirement if they have money for it.
This is why for retirement planning, it is a very individual thing. A young man said to me, "I don't have any plans for retirement. I will worry about that when it comes time to retire." Man, I'm glad I'm not related to that guy, cause I know he's going to come begging to family members to help him out because he didn't plan.
Thanks everyone for all your thoughtful comments. Regarding why of the credit card debt the answer is that although I knew what my budget was, I thought I could pay it off at the end of the month. Despite having run the numbers before my retirement, with my husband I don’t think I fully grasped the situation of living om a monthly paycheck! Believe me I do now! I am heartened by the fact that I can return to work part time and will be doing so and there’s one poster here suggested will probably keep it in the future to add to our savings and to have funds for traveling, which we truly enjoy. I think that for me the first year was like being let out of school for the summer LOL in that I wanted to do everything and go everywhere. Not realistic I know. I do have budgeting software very good when in fact and had I followed it would not be in this predicament. So here’s to biting the bullet and committing to number one paying off the debt, number to increasing our savings , And number three adding to our travel fund so this does not happen again. Thanks everyone for your thoughtful responses.
I’m finding since I’m retired, furniture pieces that were simply serviceable before are annoying and ugly and falling apart now I’m home most of the day. I’m looking at doing a little redecorating and repainting and cleaning up and out. I’m also not only breaking into my fabric stash to make little things here and there, but I’m also taking into account some great sales.
And a few house things have turned up, meaning we’re going to have to spend some real money on things.
And by the way, both my sisters, who are older than me, went through a “nesting” period after retirement, too. So, I don’t think what you’re experiencing is at all unusual. But, we all three experienced that “Whoa, we got to rein this in!” moment, too. Actually, I haven’t yet, because I’ve planned to spend a bunch of money, and because I saw my sisters go through this, I reined in while planning. My furniture purchases have strict budgets.
Not retired yet, I am turning 70 so not sure if I will retire next month or five years down the road, but we are prepared to retire and have experimented with our "worst case" retirement budget for nearly one year now.
Our worst case is after we pay for the mortgage (yep, still have one), real estate taxes, HOA fees (water and trash pickup included in the HOA fees), insurance, electric, gas, cable, internet, auto insurance, expected pharmacy, church offering, our Medicare plans G and D along with dental insurance we have $1,837.84 left over for food, entertainment, gasoline, car repair, beauty/haircuts, clothing and so forth.
We have a swimming pool in summer and our Medicare Part G pays for our memberships at Anytime Fitness which is only 1/2 mile from our condo. The condo fee pays for all outside maintenance so we might get bit with air conditioning or an appliance going out but yard work and things like roof replacement is covered under the condo fees.
That comes out to $424.44/week or $60.63 daily but our budget is $1,700 so $137.84 is for savings and our actual spending allowance is $392.61/week or $56.08 daily.
Good thing is where we live we are absolutely comfortable and love it. We keep the light on and the temperature in the house exactly where it is most comfortable for us year around.
For budgeting we use a bank credit card that gets paid off every month the same day the statement hits. With the bank app we can always tell exactly how much is on the card and where we stand on the budget on a daily basis. For example right now $350.54 which leaves us with $1,349.46 for the 24 days left in our billing cycle. We should be at $340.00 so we're $10.54 over budget but we always seem to run a little high at the first of the month and included in the $340.00 is $100.00 cash we took for us to do whatever. Gotta have some freedom.
If we have money left over at the end of the month we carry into the next month and the reverse is true.. if we go over by $100 then our budget next month will be $1,600 and not $1,700. Sometimes we are under and sometimes over but all in all it's been pretty even.
Not grand living but comfortable enough and while our savings isn't grand it's enough to handle things like if we need a new car or all the appliances need be replaced so it isn't like a small emergency would wipe us out.
But I am still working and where that money is going right now is onto the mortgage and I am happy to report we are really kicking the mortgage's butt! If you put the equivalent of five months mortgage payments every month it drops really quick which is one of the reasons I still want to work. Getting rid of the mortgage will leave us in a very comfortable condition leaving us with around $2,580 every month and we can certainly live happily on that. Maybe take a couple of trips every year.
Maybe this sort of thing won't work for everyone but it certainly worked for us giving us a clear idea of what we need to be financially comfortable and secure.
You know, if you have something useful to say, you can just say it. And leave the smack: for spanking the monkey.
I have said it. Three separate times in this thread alone. But I'll say it one more time just for you. The advice you gave to the OP to turn unsecured credit card debt into secured debt is just about the stupidest, most imbecilic financial advice one person could give to another person that I've ever seen.
Again thanks for all the helpful comments! Just to answer a few questions, no I’m not bored, as a matter of fact, generally pretty busy. DH and I have 3 grandkids between us that keep us plenty busy. I love to read and either borrow from the library or download an ebook also from the library. ‘M cooking most of our meals at home and keeping up with the housework keeps me occupied. I have a large extended family and we visit frequently l, DH and I are involved in a weekly Bible study group.
Several readers commented on “nesting” or wanting to make our home nicer, now that we’re not working and that struck a cord. We’d had a lot of our furniture for many years and it was serviceable, but looking worn and shabby so we’ve been painting, replacing some old stuff and getting rid of or donating items.
I would not consider a HELOC because I’ve had friends and some family make that mistake and used their homes equity to pay off debt only to have things go south and be foreclosed.
At this point, I don’t need to go back to work to pay off our debts but I don’t like to pay interest so I’d just prefer to do that and pay it off quicker.
Also, other than our family, our passion is for travel, and we don’t want to give up doing it unless health or finances prevent. So off to work I go !
Again thanks for all the helpful comments! Just to answer a few questions, no I’m not bored, as a matter of fact, generally pretty busy. DH and I have 3 grandkids between us that keep us plenty busy. I love to read and either borrow from the library or download an ebook also from the library. ‘M cooking most of our meals at home and keeping up with the housework keeps me occupied. I have a large extended family and we visit frequently l, DH and I are involved in a weekly Bible study group.
Several readers commented on “nesting” or wanting to make our home nicer, now that we’re not working and that struck a cord. We’d had a lot of our furniture for many years and it was serviceable, but looking worn and shabby so we’ve been painting, replacing some old stuff and getting rid of or donating items.
I would not consider a HELOC because I’ve had friends and some family make that mistake and used their homes equity to pay off debt only to have things go south and be foreclosed.
At this point, I don’t need to go back to work to pay off our debts but I don’t like to pay interest so I’d just prefer to do that and pay it off quicker.
Also, other than our family, our passion is for travel, and we don’t want to give up doing it unless health or finances prevent. So off to work I go !
I see, but it is still a credit card the way it functions. I thought saying no credit card was no plastic at all.
I guess some people need that because they carry a balance on their credit card. That's something I've never done. I use Discover Card as much as I can, because it pays back 1% and has no annual fee. But I pay the balance off in-full each month.
The OP would be wise to have a HELOC, because it is a much lower interest rate than credit cards especially if you have good credit. But if they have an issue controlling spending that's another problem all by itself. But I suspect the OP doesn't have that, and it is just a new experience of being retired. $15K isn't horrible at all and transferring it to a lower interest rate for a HELOC is the best thing to do now, especially since the house is paid off. And the HELOC interest should also be tax deductible.
first rule of good money mgmt is never take unsecured debt and turn it in to secured debt-ever .
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