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When it comes time to spend the decades’ worth of money you’ve saved for retirement, is it truly possible to do so guilt-free? Here, author Darius Foroux proposes a milestone-based approach to spending based on two levels. While the first will likely be in your pre-retirement phase, the second is one you can certainly leverage now.READ THE ARTICLE
Level 1 – The emergency fund: Start with a one-month emergency fund to cover your living expenses, then reward yourself with something small. Then, progress to a three-month emergency fund for more flexibility in spending on meaningful items. Lastly, build a six-month emergency fund for financial security, allowing you to save for larger purchases like dream vacations.
Level 2: The intangibles of a secure, happy life: Focus on aspects beyond material possessions, such as a fulfilling life and circle of strong social connections. Additionally, pinpoint your "financial independence number" to guide your spending pace. Once you are halfway to your financial independence goal with established emergency funds, allow yourself guilt-free enjoyment of your money.
Knowing when you’ve reached “enough” is key to spending guilt-free, but it requires intentional planning to gain the confidence you deserve.