How to spend your money without guilt

Go ahead, splurge on a family vacation and make some memories. Photo by Siena Hilt

By Donna Fuscaldo
Posted on February 10, 2026

Want to spend a little extra money in retirement without the guilt? There are some strategies you can use.

Think of them as “permission to spend” rules. They can allow you to splurge a little without throwing your retirement savings plan off track or causing you sleepless nights worrying about outliving your money.

After all, we’ve been conditioned to save as much as possible, so spending in retirement beyond whatever withdrawal rate we committed to, even if we can afford to, can be downright scary.

“I’ve talked to people who have a lot of money who are living on $4,000 a month,” even though they can afford to take trips and upgrade their homes, said Nancy Gates, lead educator and financial coach at Boldin.

They don’t spend money due to fear and guilt, she said. Permission to spend rules can “motivate people a little,” Gates said.

If you have a retirement withdrawal plan in place but can afford to spend a little more, but are afraid to, follow these two rules for a little guilt-free spending.

The 0.01% rule

Popularized by finance blogger, author and Ritholtz Wealth Management COO Nick Maggiulli, the 0.01% rule is designed to eliminate stress about any purchases that are 0.01% or less of your net worth.

Let’s say you are worth $1 million; you can make purchases of $100 or less worry-free, according to the rule. That doesn’t mean you can make 10 purchases of $100 per day. It means you have an $100 extra per day to spend. You can use it daily, weekly, monthly or annually.

The rule is based on the assumption that your assets will return around 4% a year, and that’s 0.01% per day. If you spend that portion of your net worth, it won’t take away from your savings.

“You can spend up to 0.01% of your net worth each day without significantly impacting your long-term wealth,” said Mindy Yu, senior director of investing at Betterment at Work.

“In retirement, the rule can be applied based on the assumption that you can conservatively generate an average annual return of 4%, enough to offset this level of spending over time.”

This rule provides retirees with a quick gut check for day-to-day spending decisions. Thinking about a golfing outing, but don’t think you should spend the extra $500? If your net worth is $1 million and you haven’t spent your extra 0.01% for five days, you can do it worry-free.

“Frameworks like ‘the 0.01% rule’ are helpful in the sense that they offer a simple way to think about daily spending without fear of overspending,” Lu said. “While there’s plenty of guidance on how to save for retirement, there’s far less clarity on how to spend down those savings in a sustainable way.”

Spend the gains rule

Another approach to guilt-free spending in retirement is the “spend the gains” rule. With this strategy, if your retirement investment portfolio performs better than its projected returns for the year, you can spend that money guilt-free, Gates said. If your portfolio doesn’t outperform, you can’t take anything extra.

“Let’s say your plan built in 6% gains each year, and you get an 8% gain in one year. With this rule, you spend that,” she said. “You are rewarded in strong markets, and it’s not permanently impacting your withdrawals.”

Basing it on portfolio growth is another way to approach the spend the gains rule. If you are projecting a portfolio balance of $1 million at the end of the year and it’s $1.5 million instead, you would be able to skim off the top with this rule.

“The portfolio becomes fun money. It’s permission to spend,” said Gates. “If the money runs out, you can’t go on vacation, but you can still pay the bills.”

Have a long-term plan

Should you splurge on that trip? Should you make that home improvement? Should you buy that boat?

With these rules, you’ll know it’s okay to spend without jeopardizing your long-term retirement strategy. But they shouldn’t be your main plan.

“Retirees can use ‘the 0.01% rule’ as a quick gut check for day-to-day spending decisions. However, it shouldn’t be the sole factor in determining a sustainable long-term budget in retirement,” Lu said.

“Other considerations like investment performance, income sources, market volatility and inflation can all impact how much a retiree can reasonably withdraw over time.”