June 14, 2024
gradyreese / Getty Images

gradyreese / Getty Images

As you get older and hopefully more financially secure, it can be tempting to stick to the same frugal money habits you’ve always practiced. However, it may be time to loosen the purse strings a bit and adopt some less-frugal habits that can actually increase your happiness and fulfillment.

Rigid frugality may have served you well to build savings, but it can limit joy and purpose. As you age and gain financial security, thoughtfully spending more on what matters can foster fulfillment. With reasonable balance, you can find the sweet spot between overindulgence and restrictive penny-pinching to get the most out of your money and life.

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Travel More While Health Permits

Travel is one of the top aspirations for retirement, yet many put it off, waiting for that perfect time. As age inevitably catches up, health and mobility challenges can get in the way of seeing the world. If you’ve got the money to travel, do. Carve out the time now.

Time is your most precious asset. Paying for a trip now that brings joy and meaning, before you can’t anymore, is worth prioritizing over penny-pinching. Travel can enrich your life through new cultures, foods, sights and perspectives. The flight might be expensive, but the memories will be priceless.

Discover More: 8 Tips To Fly Business Class for the Price of Economy

Let Yourself Spend on Meaningful Experiences

Just like travel, there are many other special experiences that bring more lasting happiness than spending on material goods. Attend a concert, treat yourself at a spa or dine at a Michelin-starred restaurant. As you get older and have the means, focusing on creating memories over buying new “stuff” is often money well-spent.

“Prioritize spending on meaningful experiences more than material goods. Research confirms that memories like vacations and concerts bring more happiness long-term,” said Jude Caratao, personal finance expert at Debt Mate.

Scott Bishop, partner and managing director at Presidio Wealth Partners, agreed. “Many get more frugal once the paycheck stops,” he said. “Don’t wait until it is too late; do it while you are young and healthy enough to enjoy it!”

Splurging on a bucket-list item or a special family dinner can pay dividends in joy and connectedness for years to come. The memories last forever.

Give Back via Charity

As your nest egg grows, consider embracing generosity through donating money or time to causes aligned with your values. Research shows that giving back enhances well-being and life satisfaction.

“Embrace generosity and purpose within your means — donate time or money aligned with values judiciously,” said Caratao. “Finding ways to give back heightens wellbeing.”

If you’re over the age of 70½, Bishop recommended making qualified charitable distributions from your IRA. He said this can be “a great way to give to charity and possibly reduce the tax impact of current or future RMDs (required minimum distributions) that can have ‘stealth taxes’ like additional IRMAA Medicare premium costs.”

Look for tax-advantaged ways to donate to charitable causes, as well. Giving money or volunteering for organizations doing good helps others while nourishing your soul.

Consider Giving an Early Inheritance

“If you have adult children, or grandchildren, as well, consider gifting money to them during your lifetime so that you can see them enjoying your money rather than simply knowing they’ll get it when you pass,” said Carla Adams, founder and financial advisor at Ametrine Wealth.

Supporting younger family members can be profoundly meaningful. If you have financially responsible children or grandchildren who can use the money to help them pay for childcare, college savings or a down payment on a house, gifting your money during your lifetime is certainly something to consider.

“Seeing your kids put your hard-earned money to good use and seeing them relieved of some financial stresses may be incredibly gratifying,” added Adams. “But don’t do it if you have doubts or discomfort; it should be something that feels really good. You are the best judge of your kids, how responsible they are with money and whether or not it is something they will take for granted.”

In 2024, the annual gift tax exclusion goes from $17K a person to $18K a person, or $34K to $36K per couple. If both you and your spouse are living and your children are all married, you can gift up to $72K per child each year without incurring gift taxes.

Contribute to Future Education Costs

If you have younger family members, Patricia Roberts, chief operating officer at Gift of College Inc., suggested setting up dedicated 529 college savings accounts.

“What’s great about a gift like this is that it’s a win/win,” she said. “It’s a win for the child, who will have the opportunity to pursue career and academic dreams without the stress of student loan debt, and a win for the older adult/gift giver, who can benefit from the many tax benefits of 529 college savings plans.”

She pointed out that contributions to 529 college savings plans are considered completed gifts to the beneficiary and are removed from the donor’s estate. This means that this money is not taxed upon your death.

“Contributing to 529 accounts is an opportunity to both give and receive, and one that older adults who are financially secure should strongly consider to set those they love onto a positive path for their futures,” concluded Roberts.

Seeing loved ones able to pursue academic and career dreams without student debt can be incredibly meaningful. College costs will only increase, so this gesture can change lives.

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This article originally appeared on GOBankingRates.com: ‘You Can’t Take It With You’: 5 Less-Frugal Money Habits To Adopt as You Get Older

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