The Shift to Spending Your Own Money

After nearly 20 years of sitting across the table from real clients, there’s a pattern I’ve observed.

While people are working, they’re surprisingly relaxed about their spending. Salaries land monthly, business income flows in, bonuses pop up, and life just… happens. Holidays get booked, cars get upgraded, kitchens get redone. There isn’t a huge amount of scrutiny on their expenses. Not because they’re reckless, but because the money feels abundant and regular.

In simple terms, it feels like OPM (other people’s money). Of course, it isn’t. It’s their income, earned through their time, energy, and/or risk-taking. But psychologically, it doesn’t feel like “their” money in a way. It arrives regularly, almost automatically, and gets spent just as easily. They are exchanging human capital for income, and because that exchange is ongoing, the spending feels free.

Then something changes.

They stop.

They either sell their business, step away from their career, or simply decide they’ve had enough. The monthly inflows either reduce significantly or stop altogether. What replaces it is their built-up investment portfolio, pensions, ISAs, investment accounts, the pot they’ve spent decades building.

And for the first time in their life, they are spending down their capital.

This is where the mindset shift hits hard.

Suddenly, every withdrawal feels different. The same £5,000 that once disappeared on a holiday without much thought now carries weight. Clients pause. They question. They become acutely aware of what they’re taking out.

Why?

Because it now feels like OM (own money).

There’s no employer paying it. No client invoice replenishing it next month. No deal around the corner, topping it back up. It now feels finite, visible, and, in their mind, vulnerable.

What fascinates me is that their financial position is often stronger than it has ever been. They’ve done the hard work. They’ve built significant assets. They’re financially independent by any sensible definition.

But behaviourally, they feel poorer. They may spend hours on comparison sites trying to chip down their expenses.

As advisers, this is where we earn our keep.

This isn’t about spreadsheets, withdrawal rates, or complex simulations. It’s about helping clients reframe what’s happening. The portfolio isn’t a fragile pot to be protected at all costs, it’s the very thing they built to be used.

We need to remind them that they’ve simply converted one form of wealth, human capital, into another, financial capital. The purpose hasn’t changed. It’s still there to fund their life.

The real risk at this stage isn’t overspending.

It could be underspending.

It’s clients living smaller lives than they need to because, for the first time, the money feels like it’s truly theirs.

And that’s the irony.

They’ve spent decades earning it, but only in retirement do they finally feel it. Spending hits differently in retirement.

I’ve been having frank conversations about this shift.