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Getting Perspective – Permission to Spend More!
By Sally Pessin, Esq., CRPC®
I have a handful of high-net-worth financial planning clients who are unnecessarily scared to spend their money. Most came from little means before making their fortunes. Like me, they grew up with parents, who despite having had resources had a depression-era mentality. Till the end of his life, my father was still very frugal despite having owned two valuable, five-bedroom homes.
Another very wealthy relative of mine would brag about finding one-dollar toys at yard sales for the grandkids; he lived in a mansion with an indoor pool and an elevator! Another relative, who became a Fortune 500 executive grew up dirt poor in the Midwest during wartime rationing. His mother once experimented with making a meal of acorns. Once, the executive’s wife sent him to the market for toilet paper for his family of 7: he returned with a single roll.
It’s usually the partner of this type of fearful client who will initiate a meeting with me because they cannot convince their better half that their ascetic behavior is not rational. No matter how small the expenditure, the befuddled partner is told, “we can’t afford it.” When I meet with these clients, we run several online calculations so they can see in black and white that they have been unduly cautious.
What I usually advise is ratcheting up your spending a little at a time. You can always pull back if the market tanks or if you experience a spending shock such as having to replace a car. Try to identify what the worst-case scenarios would be and map out a game plan on your own or with an advisor.
If you came from nothing, you would know that you can survive on less, but you can also breathe a bit easier while spending and so can your partner.
About the Author
Sally Pessin is a retirement planning counselor as well as financial wellness coach.
You can visit her website for more information.