4 Ways Middle-Class Retirees Can Splurge Without Breaking the Bank
Written by
Adam Palasciano
Edited by
Nicholas Morine
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Paving the way to a financially secure retirement means working hard while you save and invest money along the way. It’s also important to stay out of debt, especially as you near retirement.
According to the 2023 Nationwide Peak Retirement Survey Insights Report, retirement-age Americans carry about $70,200 in debt on average. The largest share of this debt includes credit card debt (53%), home mortgages (39%) and car payments (33%).
As a retiree, you might find yourself splurging just a little bit, or perhaps you’re splurging too often. It’s never a good idea to splurge to the point where you’re putting yourself in debt. However, there are several ways to splurge without breaking the bank (and without feeling too guilty).
Here are four ways to treat yourself without emptying your wallet or causing too much guilt, according to Ally Bank.
1. Be Aware of Your Limits
It’s easy to spend money. But spending too much on expensive clothes, fancy dinners out, or luxury vacations is not worth going into debt. It’s crucial to analyze your finances to determine how much discretionary income you can feasibly spend each month, especially if you’re living on a fixed income. Set limits on how much you can spend on different discretionary income categories and be sure to always budget to keep your financial health in check.
2. Get Familiar With Your Money Story
Having a deep understanding of your money story can help you splurge responsibly. Oftentimes, your financial perceptions are shaped by the values that your family instilled in you or from what you learned in school. Fully understanding your whole money story can help form your money mindset as a retiree. This way, you can create a mindset that allows for some splurging while still respecting your money values.
3. Plan Carefully
Careful financial planning leading up to and during retirement is crucial for long-term financial success. For example, consider setting up a high-yield savings account with automatic weekly deposits from your checking account. You’ll be able to set aside money without even thinking about it, and perhaps have some cash to splurge once in a while.
4. Give Yourself Permission
If you permit yourself to spend some extra money on things you enjoy, you may not feel as tempted to splurge. Organize your budget accordingly so that there’s some room for discretionary spending money. After all, retirement should be fun and enjoyable, which sometimes involves spending some of your hard-earned savings.
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