Here's a retirement issue you don't read much about – "spendaphobia," or the reluctance to spend. Some U.S. research has found that, aside from households of modest means, seniors were spending less on average than they had available to them from their own savings and government programs.
One of the explanations for this pattern is that seniors have formed a lifetime habit of thrift and don't feel comfortable increasing their spending in retirement. If that's the case, then the so-called retirement consumption gap – spending less than you have – may not be a long-lasting trend. The baby boomers now heading into retirement certainly know how to spend.
Here's a list of signs you're under-spending in retirement – some of them are U.S.-focused, but a couple are relevant to all. Example: You're sleeping on a sub-par mattress.
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Just an old guy looking for work…
An 89-year-old British war veteran advertises in his local paper to find a job that will stop him from "dying of boredom." Reinforces the lesson that you have to plan how you'll spend both time and money when you retire.
…and for an affordable rental
A report on how some seniors in Vancouver and Victoria are being elbowed out of an increasingly expensive rental market. One man spent a week living in an underground parking lot.
Behind-the-scenes secrets of auto mechanics
An insider's explanation of how they sometimes overcharge you.
A vacation from inflation
The price of flying has been falling for 30 years. This includes those annoying fees for checking a bag.
The best way to pay off debt
A comparison of the debt avalanche and the debt snowball. Worth a read because it looks not only at the math, but also at the role that human behavior plays in sticking to a debt reduction plan.
Check out this $1,500 toaster oven
It's cited as an example of how simple things like household appliances are being made excessively complex through the addition of tech that adds no value.
The question: "We're a young couple aiming to save a 20 per cent down payment over three years for our future home through monthly contributions. What are some good ways to place/invest this monthly contribution?"
My reply: Don't risk your house down payment in the stock market, which is suitable only for money you don't need for at least five and preferably 10 years. Instead, use a high-interest savings account and keep your money safe. See the featured video mentioned below for ideas on where to find the best savings rates.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length.
The outlook for returns on savings accounts, including the banks with the highest rates.
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