I Spent Too Much Money! Now What?

by | Jun 2, 2023 | Videos

I spent too much money — now what?

I’m retired and I spent too much money!  Now what?

Unexpected expenses happen all the time! So, expect them.
We can help you prepare for that.

We take a lot of time building cash flow projections for our clients and preparing for unexpected expenses – something happens (it seems) every month.

In this week’s video (episode #343), Casey discusses what your next steps should be —
if you find yourself in a situation where some unexpected expenses have caught you by surprise!

Watch the video by clicking above, or watch it by clicking over to our Mullooly Asset YouTube channel 
(don’t forget to “like” and “subscribe”!!)

You can also view all our Mullooly Asset videos right here on our website.

Transcript for “I Spent Too Much Money”

Oops. I’m retired and I spent too much money. What do I do now?
Tune in to find out

Welcome back to the Mullooly Asset Show! I’m your host, Casey Mullooly; back with you for episode 343. Two episodes in a row. All right.

So, everyone knows the feeling… you spent too much money. You stretched yourself thin.

You probably have some regrets. And let’s say you’re retired.
What are you supposed to do now?

So we say retirement income needs depend – a lot – on what you’re going to spend, what lifestyle you’re going to live…

And while that is a good thing – because spending is probably the most within our control – out of (all of) the other retirement factors.

So what I mean by that is you don’t know how long you’re gonna live for.
You don’t know, precisely, in what order your investment returns are going to happen.
But spending – for the most part – is within your control.

Except when it isn’t!

We know that life is unexpected and “the unexpected” usually costs a lot of money! Maybe you need a new roof. You need a new car. Or, maybe you get sick and have really high medical expenses for a couple of months.

Those are expenses that you’re going to pay. There are no questions about that.
So what are you supposed to do?

Well the first thing is don’t panic!

We know that life is unexpected. But you don’t want to be panicking and making drastic decisions in this period of time.

You might be tempted with your portfolio to try and “out earn” those bills, make up some of the difference in your portfolio.

You may be tempted to lever up your portfolio invest in more risky assets because they can earn you more money. Not a great idea. You might be tempted to go the other end and blow everything out: sell it all, move it to cash, because you want to have that cash on hand.

That is not a great idea either!

What you might want to do is rebalance your portfolio.

If you took a big lump sum distribution, (say) things got out of whack. You might want to rebalance get everything, back in line. But don’t make drastic decisions. Don’t panic because that’s when mistakes happen.

The second thing you want to do is you want to identify discretionary areas of spending – ahead of time. So you have that peace of mind that you can cut (for example) $500 from here, or $200 from here, each month.
And that’s how you’re going to make up the difference.

If you have unexpected costs – you have those medical expenses – you’re GOING to pay those. But you might be able to cut the European cruise this summer – or something like that.

Everyone’s situation is going to be different. Everyone’s got their nuances within their own cash flow and balance sheets.

We recommend having those areas identified, ahead of time.
Like I said it gives you some peace of mind knowing what the plan is going to be.

The other thing that can be done is to prepare for this going INTO retirement. And we do this by what we call “baking in some wiggle room,” because we know that the unexpected is going to happen. Not everything is going to go “according to plan.” And we feel it’s better to prepare for that – ahead of time – by baking in some wiggle room.

It’s better to do that ahead of time than to be reactionary – and make moves AFTER the fact. So, bake in some wiggle room, bake in that margin of error, into your retirement projections!

If you need help projecting your cashflow or your retirement income needs, for your retirement – get in touch with us.
We’d be more than happy to help!

That is going to do it for episode 343
Thanks, as always, for tuning in. We’ll catch you on the next one!

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