September 23, 2018

Learning to Adjust to Retirement Income

It's been almost nine months since Dan's accident and about six months since Social Security retirement kicked in. I have to say that even though he no longer goes to work, he's busier now and works harder than he ever has. And he couldn't be happier.

There have been several aspects of learning to adjust to our new income. We always knew it would be quite a bit less than what were were used to, but that's part of why we took up homesteading in the first place. By meeting more of our own needs we don't have to be as dependent on money. "Retirement" came earlier than we expected, but since a financial scaling down has always been a goal, it wasn't that difficult to adapt. The more challenging adjustment has been in the pay schedule.

As a truck driver Dan got paid once a week. We calculated our budget monthly and put weekly amounts into our budget categories: bills, tithe, groceries, fuel, household expenses, etc. Most months have four weeks, which was how our budget cycle was set. An occasional fifth Friday in the month was like a bonus, with an extra paycheck for the month.

Social Security pays out monthly. We still work off of a monthly budget with weekly spending categories, but some months are longer than others. Out of habit I still start our budget week on Friday, and if there are four Fridays in the month, all is well. But the occasional fifth Friday is no longer a bonus. It's an extra week we have to wait before we get paid again, so we had to figure out something. 

We discussed a number of ways to deal with it. Choosing another day to start our budget week wouldn't change anything, because those extra days can hit anyplace. We could do monthly spending adjustments to compensate for a 5th week, but that seems like too much trouble. We finally decided to make all 5th Fridays no-spend weeks.

As it turns out, occasional no-spend weeks really aren't that difficult. A large part of our diet is homegrown and I'm a stock-up shopper anyway. So it only takes a little planning beforehand, and really, no extra spending. The best part is that I get an occasional week off from shopping and running errands. I like that part a lot!


Gorges Smythe said...

You're right, that fifth weekend is a killer. We did the same as you, but I'm now trying a half-budget the first and fifth week. I think the missus still prefers the no spend week, though.

Leigh said...

Gorges, that's an idea I didn't think of. Do you think you'll stick with it or go back to the no spend week?

Mama Pea said...

A bit of juggling, but I know neither you nor Dan are incapable of managing that in a way which suits you best.

You say Dan has never been happier than since his "retirement." Goes to prove that every cloud has a silver lining. (Although some clouds can be very heavy [!] for a period) Good for both of you! said...

I just found your blog and enjoyed reading about the frugal budgeting. we are not dependent yet on SS as my husband ,who just turned 68, is still working fulltime. I'm honestly not sure what will happen when we are living on a smaller amount. We have very little in the way of retirement funds but I guess we'll manage since we've gotten this far. I like your approach to the no spend week. I do them occasionally and it's a real eye-opener when you realize you can go 7 days without going into the store.

Leigh said...

Mama Pea, thank you! Actually the challenge has meant that we've had to come up with alternative, and often better, ways of doing things. We're really happy with our silver lining, and I honestly wouldn't want to go back to having more money if it meant him being frustrated with his job.

Christina, sounds like you're in the same boat as us. I can only encourage you to keep on toward the goal. You don't think you can manage, but you do. One of the things I've figured out over the years is that spending can easily become a habit. We get used to spending for certain things at certain places. Any time we face a need or problem, the first thing that comes to mind is something to buy. Impulse buying was tough for me too. I found that when I stopped looking at mail order catalogues, I spent less. It was fine with me when businesses went to online ordering, because sales sites aren't set up like catalogues, i.e., I can't just pass time by flipping pages. If I don't see it, I don't think to want it, so that helped a lot too. ;) I'm sure we each have our areas to work on.

Toirdhealbheach Beucail said...

Thanks Leigh. I am some years behind Dan but am already trying to think towards this end, as in my industry (Biopharmaceutical) I am getting a little long in the tooth as a potential hire in the event of a layoff or buy-out, both of which are rather likely occurrences.

Christine - To echo Leigh's point, I have found that spending very easily becomes a habit, one that becomes unthinking for me unless I actively pay attention to it. For myself, I am finding I constantly have to ask myself the question "Do I need it? No, do I really need it?" And if I need it, I then have to train myself to start looking at the free options first instead of the ones that cost me actual money.

Do not be discouraged and do not give up. Even within each our limitations and places that we are in our lives, there is the opportunity to start making a better way, even if it just starts with a different attitude.

Toirdhealbheach Beucail said...

Also for what it is worth, both my parents and my in-laws are retired and living on their retirement incomes. What I have seen in their lives is that for the whole, their spending has dropped a great deal. As my father notes, he really has everything he wants and then some and other than taking day trips in the car, really does not like to travel. They enjoy going out to eat, but their dinners are inevitably less than $20.

Cockeyed Jo said...

Leigh, Adapting is living. Spending habits change from time to time. Early retirement is never easy. If I'd only had a couple more years, is a common regret, It was for me. I'm happy for Dan. He's found his niche. That is often the hardest thing to do.

I've found in the last six years, that I have everything I need and am blessed. In spite of having to juggle finances, I still plan for one night a month for us to go out for dinner. It's a necessary evil. It's in the budget. Ours wants take planning. More so with neither of us working outside the homestead. Limited income aside, we love it here. It's a small trade off. ~ Jo

Cozy Thyme Cottage said...

Sounds like you are figuring it all out and managing well. There can be many "unexpected" in retirement. I hope things go well for you. Nancy

Leigh said...

TB, hopefully you'll be able to retire on your own terms. I think back in the day retirement was thought of differently. The idea was that by the time one's kids were on their one, one's home paid off, and a smaller retirement income would be more than adequate. Today everyone seems to want a wealthy retirement. Times change.

Jo, loving it, that's the key. It seems most folks don't like their jobs and are dissatisfied with their lives. Money is their only hope of changing things.

Nancy, thanks!

Goatldi said...

Lots of good comments and thoughts going on. Leigh I think you hit the nugget of the situation on the head. Society has had a nose ring for a long time and have believed the magic. If only is the catch phrase.

One of my favorite quotes is "Wherever you go there you are." Mary Engelbreit

Life is what we make it when we look at it. I think too that planning is imperative to surviving retirement. In a case such as yours and Dan's it was a curve ball. But you have very nicely taken what was thrown your direction and made it what you needed it to be. The old if you can't change something change how you look at it.

I too am guilty of "look there goes a butterfly" or better known as impulse buying. Wow that would be nice to have fill in justification to buy.
I have pretty much tamed the demon by limiting myself in situations that lead to that. I make myself wait a certain period of time and usually when the time is up I find myself wondering what was I thinking.

I am imagining we will find a lot of commonalities in how folks handle this stage of life. Also differences. I am looking forward to what I can learn from the comments on this topic.

Ed said...

Love the concept of putting it to a specific time frame. We have never been big consumers so we have plenty of weeks where we don't spend anything even though we never plan to do so. It just happens.

Goatldi said...

Two more thoughts came to mind today.

One is I think the biggest adjustment is often being with the newly retired person more. I often thought the first few years after Geoffrey retired "I can't miss you honey if you are never gone." The up side is if your life style is that of homesteading there is always more to do than time. So in the end it evens out and like Dan I believe many fellows are delighted to have more time for their home bound endeavors . And I don't blame them one bit.

What Ed said is so very true. Geoffrey has always disliked "shopping" for anything . I have grown weary of the need to go down the hill anymore than I have to. I remember a visit to a friend a few years ago. It was a Saturday and I was hoping to get in some walking time.I have always loved visiting friends and family once a year or so but found it difficult living on the schedules that are so different from mine especially if it is lifestyle differences. I digress so onward. The lady of the house gathered the children (teens) around and said "lets go to the mall." And we all packed ourselves into their vehicle (her hubby included) and did so. No reason just because it was something to do. I never have nor ever will "get that". So Ed makes a good point you don't miss what you don't do.

Susan said...

I'm taking notes.

Pricket said...

My mother was eldest of 7 with a widower father in 1932. She impressed upon me the need to have your house in order and not go into debt. Prior to retirement everything was payed off no credit cards, no mortgage no car payment no insurance payments any more. The tools and buildings for my homestead were in and payed for. I put away a modest emergency fund for major accident, new car replacement HVAC etc. I have enough to put away several hundred every month from my social security. This past year as I see severe storm clouds gathering on the horizon I have been using that extra money to put away dry goods and long term storage food to augment what I produce. Goodwill etc. provides excellent cloths and a lot of household items as I need replacements. Like Dan I now have a fourth of the income but am happier and more content then ever. God has been very good to me.

Leigh said...

Goatldi, yes, a lot of good comments! And I so agree with you about viewpoint and attitude. Learning to accept and be content when called for is a valuable tool. Like spending, I think discontent is a habit. And yes, being "together" all the time is another adjustment! But in homesteading it's a good one, because there is so much to do. It feels more like we're sharing the load rather than me trying to just keep things afloat by myself.

Ed, that's a wonderful place to be. Money is a tool, and I am so glad we never became dependent on it for entertainment. Like Goatldi, that's something I never did "get."

Susan, one of the things we've done that's helped, was to work hard on infrastructure while we had the higher income: outbuildings, tools, equipment, and making the house more energy efficient have all been worth it. We viewed them as one time expenses and projects, even though they'll need maintenance and repair from time to time. Having almost all of that in place before "retirement" has been very helpful.

Pricket, that is absolutely excellent advice. I think part of the reason folks can't live on less is because of debt. In our entire married lives, Dan and I have done without rather than buy on credit (except for our mortgage) and I am so, so glad of that, especially now. Several times we tried to get our mortgage paid off by Dan taking a long-haul over-the-road job. He loathed it because it meant leaving me here alone for weeks on end, but somehow these jobs never worked out anyway, so that goal has been thwarted. We lament that a bit, because not having a mortgage payment would be like getting a huge raise. But fortunately it's not a large payment, and as often as I can, I pay a little extra on the principal. Even if it's just $20. It really adds up to shaving months and years off that 30 years with a huge savings in interest payments.

deb harvey said...

the worst is the four months with 5 weeks in them. now soc sec comes on a day, not a date. thus the date moves around which can put me in a bind as we are totally dependent of the soc sec and bills always come on a date.

Kev Alviti said...

Stepping down to one main income was easier than we thought when we did it. One thing I'd never accounted for was how much it cost me to work as a carpenter. So many costs all the the time that seem to get missed. That said it took some serious readjustment at the start and I do have to remind myself not to spend sometimes, my vice is tools and always will be I guess!

Leigh said...

Deborah, that is indeed the hardest part. I feel so very thankful that we were able to put away a full month's worth of bills beforehand, so we have it to pay bills on time, and then replenish that budget category when SS comes.

Kev, we all have those items that are irresistible! LOL. Your insight about the cost of keeping a job is an extremely important one, especially for folks looking to plan ahead for retirement income. Work related expenses will no longer be necessary. Dan and I save a whole lot of money by his not having to go to work anymore.

Mike Yukon said...

For me, it is the surprise expenses that are hard to deal with. Life is going fine then all of a sudden my irrigation well pump dies, $827.00, then a zone valve dies, $35.00, then on my car the tire low tire pressure dash light comes on! Had to replace the sensors at $60.00 each, $240.00 plus tax to replace them. (they are battery powered and last 5-6 years with no way to replace the batteries). This kind of stuff keeps going on and on. Savings is critical before you retire so you can handle these little things, although they aren't little when retired!

Leigh said...

Mike, the problem is, those surprises never seem to go away, isn't it? And there's no way to replenish the savings. It doesn't help that stuff is made so cheaply that it has to be replaced frequently.

deb harvey said...

leigh, this is private. so please erase.
lost my husband on the 11th after emergency surgery.
we have debt.
insurance may cover a small house in an undesirable neighborhood and his salary is gone, my soc sec gone leaving me with his soc sec. chronically ill daughter lives with us, but she has medicaid and some food stamps. looks great on the outside but lyme disease has taken quite a toll.
so, overnight income reduced by more than 2/3rds.
have been advised to get roof over head, as house was part of his employment and a new man will eventually be moved into where we are now,
unprepared. packing, cleaning , moving but no where yet to move to.
there will be no more money after insurance paid. so will have to carry debt and, God helping, find a job. will be 70 in february, daughter unable to work.
hoping for God to point us aright.

encourage readers to get out of debt. they will never regret it. sudden death or other disability can happen to anyone, any time anywhere.
no planning possible.
heart broken over loss of most loved husband and rug pulled out from under us all at once.

deb harvey said...

leigh you can leave the comment if you thin it will encourage others. deb

M.K. said...

This is something we're kind of dealing with as well - a curtailed budget, and we are trying to make it though until our SS income kicks in, in a few years. You'd think it would be easy after all the kids leave, but we seem to struggle more than we used to.