Financially Fabulous: A Retirement Wake-Up Call

When I retired, I knew my income was going to change. What I apparently forgot was that my spending needed to change with it.

For a while, I kept spending pretty much the way I had when I was working. Five months into my new lifestyle, I really looked at my bank accounts. The financial cushion I had when I retired was almost gone.

That certainly got my attention.

I hadn't suddenly become irresponsible. I simply hadn't adjusted my habits to my new reality. And it made me realize something: being financially healthy in retirement isn't just about how much money we've saved. It's also about paying attention to the money we have now.

I Forgot to Retire My Spending

Here's what happened. My paycheck retired when I did. My spending habits didn't.

For a couple years, I had gotten used to living on my salary along with Social Security. When the paycheck stopped, I knew perfectly well that I had less money coming in. But knowing something and actually changing are two different things.

I was still spending like the working version of me.

There wasn't one huge purchase that did me in. It was the everyday stuff—the things I bought without thinking much about them because I was used to that.

My income had changed, but my habits didn't.

Paying Attention Again

The first thing I needed to do wasn't complicated. I needed to start paying attention again.

I had always known how to budget. This wasn't new information. But somewhere along the way, when I had more money coming in, I had gotten out of the habit of watching where it was going.

So I went back to basics. I started looking at my checking account more closely, paying attention to what I was spending, and asking myself a question I hadn't been asking often enough: Where is my money actually going?

And wouldn't you know it—when you start paying attention, you start seeing things.

Some expenses were necessary. Some could be reduced. And some made me think, I'm spending HOW much on that?

I Already Knew This

Here's the ironic part. I've helped people with budgets for years. I've helped people work on getting out of debt. And I raised my kids with a pretty simple rule: if there's not enough money, you have two choices—lower your expenses or increase your income.

Turns out, retirement didn't change the math.

What changed was that I needed to start taking some of my own advice.

On the expense side, that's where Frugalicious comes in. I'm looking harder at what I'm spending, where I can cut back, and where I can get more for my money. I don't want to stop enjoying my life. I just want to be more intentional about what I'm spending.

And then there's the flip side of the equation.

Retirement may have ended my paycheck, but it didn't end my ability to earn money.

But I Don't Want Another Job

And I can already hear someone saying, “But I'm retired. I don't want to work anymore.”

Fair enough. You worked for retirement. The whole point isn't to turn around and recreate the job you just left.

Increasing your income doesn't have to mean going back to a 40-hour workweek. Maybe it's answering phones at a front desk a couple mornings a week. Maybe you already make bracelets for family and friends and could sell a few. Maybe you're good with a camera and someone would pay you to take family pictures. It doesn't have to be a career. It just has to bring in a little more than you had before.

And it doesn't have to be part of your plan at all. If your retirement income covers the life you want, wonderful. But if the numbers aren't working, the same two choices are still there: lower the expenses or increase the income—or do a little of both.

What Does Financially Fabulous Mean?

I've been thinking about what this means to me. I don't think it means being wealthy. I think it means having choices.

Can I afford to take the trip? Help someone I love? Try something new? Handle an unexpected expense without it turning my world upside down?

I may not have prepared as well as I wish I had before retirement. But I'm paying attention now.

Because the more financially prepared I am, the more choices I get to make about the life I want to live.