Retire early or spend?

When we want to retire early we need to take a good hard look at our financial situation and lifestyle. Many women have retired ten even fifteen years earlier than required by simply adopting a frugal lifestyle, but Averil is not a frugal type. She is typical of the 'live today and to hell with tomorrow' Baby Boomers who look like they are going to need to work until they drop.

When Averil sat down and worked out her spending habits she had to decide whether another ten to fifteen years at work was worth the lifestyle she was trying to maintain.

When we make a choice to retire early and give priority to our private lives, it goes without saying that even the rich need to cut back a bit. The average woman wanting to retire early has to cut back heaps - as Averil discovered with much dismay.

"I had no idea how much of a consumer I was, and how much money I spent on looking good, until I sat down and did an inventory of my possessions and recent purchases," laughs Averil.

The most important key to freedom is becoming a conserver not a consumer. We don't need 99% of the stuff we spend our money on. Get the picture? Poor Averil was effectively working her butt off in order to buy things she didn’t really need.

"I know, I know," sighs Averil, "One of the evils of our society is vanity and rampant consumerism. We’ve been seduced by advertisers into being vain, blind and mindless consumers, and we’re bullied by our governments to buy, buy, buy because it’s only through our blind and mindless buying that the economy thrives. Sure, a thriving economy creates jobs but the sad fact of the matter is that an economy built upon rampant consumerism creates false values and makes a few entrepreneurs very, very rich and the rest of us very, very poor - like me!"

Averil was earning a good salary but saving nothing. Her situation is very common. At the end of the month her entire salary had been expended. Sometimes, when she has several big shopping splurges in a month, she overspends her entire salary. It is easy enough to do with a credit card.

"I have several credit cards," laughs Averil, "and when they all fall due for payment at the same time, I juggle one to pay the others."

So, what does Averil spend her entire salary on every month? She worked out that she was spending most of her income on lunches. She didn’t mean cheese and tomato sandwiches from the company canteen, she meant fancy restaurants. You know, the sort of place that charges you $5 for a glass of water.

The next huge expense was clothes, beauty parlors and hairdressers. Averil was a designer label junkie. She wouldn’t be seen dead within cooee of K-Mart or Target. Even her underwear was designer label – and nobody ever saw it except Averil!

She admits to being vain, but she only really feels good about herself when she knows that she’s dressed from head to toe, and inside and outside, in designer label merchandise. She visits a hairdresser three times a week, and a beauty parlor for a facial every week or so.

Averil was in a quandary because she was tired of working, she wasn’t getting much joy out of her work any more and she felt out of place with so many young girls in her office. She wanted to retire early - at 50 - but her pension fund was inadequate for her current lifestyle. She needed to make a decision. What was more important: maintaining a luxury lifestyle and disliking work, or living within her means and enjoying her life?

It may take Averil a long time to make up her mind. Vanity and old spending habits don’t disappear overnight. In fact, the stress of making a decision has caused Averil to splurge more than ever. She bought a new sofa the other day for no other reason that she liked its color. Hello? Did it not occur to Averil that her present sofa is almost pristine and will last till the end of her days? There was absolutely no need for a new sofa and after the splurge Averil felt really guilty about buying it.

Averil admits to being an emotional shopper. She doesn’t eat when she’s stressed - like most women do - she shops. And she doesn’t shop at K-Mart or Target where she is unlikely to exceed her monthly salary. She shops at expensive boutiques. And she is a sucker for advertisements, too.

"I know that my vanity and consumerism is driven by advertising," admits Averil. "Put something enticing in front of me and I want it, even though I don’t need it. If I don’t see it, or I don’t know it’s there, I won’t go looking for it. But advertising is in your face all the time, you can’t get away from it."

Advertising has done the most damage in our society - especially to our kids . If they don't have this or that they risk being un-cool. Or they risk being less attractive. This is hard stuff for a kid to see through and turn away from. It is hard stuff for Averil to turn away from, too.

Here is the retire-early-by-being-a-miser checklist that turned Averil’s face ashen.

Look at your possessions. Do you really need any of those things? You are giving up your freedom in order to possess these things. Is it worth it?

Do you slave away in a dead-end job just so that you can pay off your car and keep up with whatever's in fashion?

Do you buy the most expensive brand rather than mending what you have or buying second-hand?

Is your garbage bin full every week?

Do you spend more than you earn and regularly get into debt?

Do you drive everywhere rather than walk or take public transport?

Are you addicted to a substance that's advertised as being cool, or, in the case of cigarettes, was once advertised as being the cool thing to do?

Averil answered ‘yes’ to most of these questions and was mortified by the suggestion that she’s an addicted consumer. Advertisers and corporations love her. They feed off her. They get rich at her expense. They pull her strings.

"I know I have to change my ways," sighs Averil. "I know I’m vain and silly with my money and it’s up to me whether I want to give myself the gift of early retirement or remain in a rut at work. It’s such a difficult decision, though.

"Maybe I should start by tearing up my credit cards - but not until I’ve got my hair done."