Halloween is one of the holidays I look forward to the most. It was, in fact, my father’s absolute favorite. We used to pull a hay wagon with his 1929 two-cylinder John Deere tractor around our country neighborhood, fully made up in our costumes for that year, whether as goblins or knights in shining armor.
Because we lived in the country, going from farm to farm took what seemed like forever back then. Looking back, it was definitely less fruitful for candy collection, but the adults got to have drinks at each stop!
Now that I’m older and live in the city, a lot is going on this time of year. Houses are decorated in all sorts of themes. And, come Halloween proper, the streets in my neighborhood are shut down to let the kids have at it in their race for candy.
A good friend of mine said something interesting to me about this year’s Halloween – at his house, he’s excited to be giving out full-size Snickers bars.
My first thought was, “Wait, what?” That’s a rare house that gives away full-sized treats. Of course, my four boys would be over the moon to stumble upon this fellow’s house. And I would be too if he was also offering Butterfingers or Skor bars (my personal favorites).
But here’s the deal – splurging on large treats rather than the mini-sizes most of us are used to says something interesting in the realm of behavioral economics, or how human temptation affects economics. This phenomenon is a real thing, and it happens on both the macro level and micro (like Halloween candy) level.
Say you’re at Costco, and you’re looking for the mega-sized bag of treats to make sure you don’t run out on the big night. Do you go for the cheaper fun-size bars of candy, or do you splurge for full-size? How you answer this question may mean more than you think. And, it’s what’s underlying your answer that matters most.
In a word, are you trying to keep up with the Joneses this Halloween? Maybe you’re worried that most other houses on your block will be giving out jumbo-sized treats, and you’ll look like a cheapskate.
While this is a real feeling, my advice is to let it go. I also advise that you take this comparison thinking out of your mind for other purchases, too, whether big or small.
To get to a happy retirement, it’s a good idea to become what I call a “Master of the Middle.” These Masters of the Middle don’t splurge on unnecessary items. Instead, they save their money for the things they care about and love to do.
This point is in line with the “Millionaire Next Door” notion, a concept the late author Thomas J. Stanley of Atlanta wrote about. He put pen to paper about something that I see firsthand every day: There are multiple paths and seemingly endless formulas to build wealth, and most people who accumulate substantial wealth are conservative with their spending.
Among the chief concerns to getting to your retirement happy place are planning, patience and prudence – prudence being our focus here.
But, are full-sized candy bars in your plastic jack-o-lantern this year are a miniature symbol of how happy you’ll be during retirement? Maybe, and maybe not. It depends on how you manage your average spending.
If you throw caution to the wind in the way you allocate your spending day-in, day-out, you’re not saving as much as you could for your retirement. And, if you spend lavishly during your retirement, you run the risk of depleting your resources too quickly.
Plus, spending on “extras” doesn’t make you any happier. In the research for my book, You Can Retire Sooner Than You Think, the Masters of the Middle reported being the happiest during retirement. Sure, they treat themselves to two vacations each year and spend more than the average traveler. But at home, they stay away from luxury stores, have either paid off their mortgage or are within five years of paying it off and typically still buy used cars. That, my friends, is life in the middle.
My advice is to ignore what the Joneses are doing. Instead, focus on your particular path toward a life-fulfilling retirement. It probably looks different than that of your neighbor across the street. And that’s okay.
While we all want happiness during our Golden Years, how we get there is highly individualized.
So, before you retire, plan on how much you’ll spend every year and try to make it reasonably consistent. Do, of course, allow yourself some flexibility to splurge. But try to live life in the middle.
And, if you can’t afford the “full-size candy bar” of retirement spending year after year, plan for the “fun-size” spending instead. That way, you’re more likely to treat, rather than trick, yourself out of a happy retirement.
