For women in retirement, it’s time to learn how to spend!

It may be every person’s dream to be told it’s time to “spend more and save less,” but for some women in retirement, that advice can be a hard pill to swallow.

Susan is the perfect example. At 67, she is a virtual poster child for smart retirement planning. During her happy, successful career in business management, she was a diligent saver. And unlike many women her age, she began working with a financial advisor before she turned 40. As a result, she has built a sizable portfolio that is more than enough to support a long and very comfortable retirement. Even if she lives another 30 years, she has sufficient funds to maintain her current lifestyle… and then some. And yet she is far from comfortable with the idea of spending down her assets.

When she was laying out the plans for her retirement five years ago, we reviewed her financial plan carefully. As expected, everything looked great. While some of her co-workers had slowed or stopped investing during the recession, she had kept a steady course, continuing to invest while stocks were ‘on sale.’ As the stock market recovered, her portfolio blossomed even more, putting her in a very strong position heading into retirement when, for the first time ever, she would be spending instead of saving. She seemed excited as we set a monthly budget and scheduled distributions of $50,000 each year—an amount that was conservative but more than reasonable considering her net worth.

Fast forward two years, and when I sat down with Susan, she was full of excuses. Not for overspending, but for underspending. By a lot. In fact, of her $50,000 annual budget, she had underspent by about 20%, spending only about $40,000 each year. Why, I asked her, are you not spending the full amount? When I told her that she could easily afford to spend the additional $10,000 each year, she told me all the reasons she hadn’t. It seemed wasteful to remodel her bathroom when it was “only me” at home. She had planned to travel, but after the first couple of trips, she realized she really enjoyed being home. Her favorite things to do—gardening, cooking, visiting friends—required little money. Her list went on… and on.

As I listened, I realized that some of her excuses made sense. If she loves to garden, why seek out activities that cost more? If traveling doesn’t make her happy, why do it? But in other situations, I could hear that she was skimping when she didn’t need to. Remodeling the bathroom was more than a luxury; the tile around the shower was leaking, and she was afraid there might be mold growing underneath. When she went to visit her best friend in Cape May last summer, she booked a room in a cheaper hotel that was “sweltering” with no air conditioning. And while she loves cooking, when she does treat herself and go out, she eats on the cheap. She only splurges if she’s with friends.

Of course, I’m a financial planner, so part of me can’t help but admire her desire to be frugal. I’m the last person to suggest careless spending, but in Susan’s case, her emotions were preventing her from balancing her spending to match her nest egg. As her advisor—and her friend—I wanted to help her live in the comfort she could afford.

I began by asking her a simple question: If you had an extra $1,000 each month burning a hole in your pocket, what would you spend it on?

At first, she just laughed. “A thousand dollars a month?! I can’t imagine!”

I kept digging. We talked about the bathroom and what it would cost to not only fix the problems, but to create a space that would make her happier every day. We talked about her niece in California who had dreams of going to veterinary school but would have to take out expensive student loans to make her dreams come true. We talked about a charity she’d discovered called Dress for Success that helps empower women by providing them with wardrobes and other tools for business success. And we talked about how much nicer her visit to Pennsylvania would have been if she’d stayed in a beautiful lodge or hotel.

By the end of our discussion, Susan realized that a lot of her reluctance to spend came from the fact that she’d always been taught not to be indulgent. I assured her that not only are there ways to spend that are anything but indulgent—including helping her niece pay for school, supporting Dress for Success, and fixing her bathroom—but that now was the time to give herself permission to indulge… at least a little. We set up automatic, systematic distributions so the money would be in her bank account each month, whether she requested it or not. She has a vision and a plan, and she agreed to call me if she can’t figure out how to spend the extra money.

The week after our meeting, Susan emailed me with exciting news. A contractor was coming out to talk about the bathroom remodel, and she had already set the wheels in motion for a mini-vacation with her friend in Pennsylvania. They’re even staying at a historic bed and breakfast together—Susan’s treat. I was thrilled.

Whether it’s our need for security, what we were taught about money as girls, or a basic fear of running out of assets, many women have a hard time spending, even when we have the money to do so. It’s something we need to overcome. From one woman to another, here’s my advice: if you have a financial plan, trust it. If you have the savings to support a comfortable lifestyle in retirement, use it! It just may be the most joyful homework you’ve ever had.