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With 25-plus years of growth ahead, your 40s shouldn’t just be about saving. We asked financial advisers how to enjoy your income now without compromising your nest egg.
By
Donna Fuscaldo
published
28 February 2026
in Features
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Feeling guilty about that daily $5.00 cup of coffee, the $500 gadget you just had to grab or that designer bag you definitely didn't need but bought anyway?
It’s easy to beat yourself up when you splurge, worrying it will derail a retirement that’s still twenty years away. But you shouldn’t.
Two things can be true at once: You can spend on the things you love today and still save for your golden years.
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Sign up"Enjoying your money doesn’t have to come at the expense of your future," says Annette Anderson, Sr. Wealth Consultant at Charles Schwab. "Small splurges like dining out or travel can be perfectly reasonable as long as saving stays on track, and you’re not forced into trade‑offs.”
Splurging becomes a problem when it evolves into lifestyle creep. Ignoring retirement savings as your income rises — or raiding those accounts to fund your next splurge or pay off old debts — can seriously erode your long-term financial progress.
"Your 40s are about protecting what you’ve built while still enjoying life," says Anderson. "Dipping into retirement savings for short-term spending should always be a last resort."
With that in mind, here's how to spend — and save for your retirement guilt-free.
Bucketing out your life
Benjamin Howarth, a financial advisor at Barnum Financial Group, hears some version of "can I buy this?" from clients all the time. His answer is always the same: Yes, as long as it’s coming from your discretionary income.
That’s the cash left over once the bills are paid, the emergency fund is topped off and your retirement contributions are on autopilot.
A quick rule of thumb for the latter: if your employer offers a tax-advantaged retirement plan like a 401(k), contribute enough to at least hit your company’s match. Don't leave free money on the table.
Howarth is a huge proponent of employing a bucket strategy to achieve this. It permits you to spend guilt-free and works like this:
Bucket 1: Fixed Expenses. This covers your essentials — rent or mortgage, car payments, utilities, insurance, and groceries. It also includes your retirement savings. These are the non-negotiables required to sustain your life both now and in the future.
Bucket 2: Emergency Fund. Experts recommend keeping three to six months of living expenses here. This bucket is your safety net, ensuring that if the unexpected happens, you aren’t forced into high-interest credit card debt or costly loans.
Bucket 3: Splurges. This is your discretionary fund. Once the first two buckets are filled, this money is yours to spend however you like. If you want to drop $2,000 on a new phone and the funds are there, nothing is stopping you.
It's the unexpected splurges that get people into trouble, like putting a vacation or a new pair of shoes on a credit card and then carrying a balance month after month, says Howarth. If it comes out of the discretionary bucket, you won't feel bad for some "me" spending.
"It removes the guilt if you blow all the money in that bucket," he said. That's because the plan forces you to make retirement contributions, cover all your fixed expenses and fund your emergency savings.
The bucket strategy in action
Imagine you net $8,000 per month and your fixed bills total $4,000. Here is how you would distribute those funds:
Fixed Bucket: $4,000 (100% of your bills and savings goals covered).
Emergency Bucket: $2,000 (this amount depends on your current progress toward your 3–6 month goal).
Splurge Bucket: $2,000 (free money for whatever you want).
It’s tempting to spend tax refunds and bonuses on yourself, but if your discretionary spending is already covered, it's better to funnel those windfalls back into your retirement account or top off your emergency fund.
The same applies to raises. When your income goes up, make sure to increase your retirement contribution rate to match it.
"It’s important to be intentional about spending and budgeting so you can enjoy your money today without putting your future at risk," notes Anderson.
Building a dream retirement shouldn’t feel like a second job. Subscribe to our free newsletter, Retirement Tips.
If bucketing isn’t for you, create your own plan
If the bucket strategy feels too cumbersome, both financial advisers emphasize that the most important thing is to create a budget and stick to it.
Before you splurge, make sure you can truly afford it. If not, set aside a little from each paycheck until you have enough to cover the purchase without racking up debt.
"You need a plan no matter what you want to splurge on," says Howarth. "If you have a plan, it sets you up for success."
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- 4 Out-Of-The-Box Retirement Moves the Wealthy Swear by
Donna FuscaldoSocial Links NavigationRetirement Writer, Kiplinger.comDonna Fuscaldo is the retirement writer at Kiplinger.com. A writer and editor focused on retirement savings, planning, travel and lifestyle, Donna brings over two decades of experience working with publications including AARP, The Wall Street Journal, Forbes, Investopedia and HerMoney.
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