How to Build a TSP You’ll Actually Enjoy Spending

Because your savings were meant for more than bills.

August 12, 2025

When Mary retired from DHS after 32 years, her TSP statement was everything she’d hoped for — a healthy balance, steady pension, and no debt.

But she still:

  • Drove the same 18-year-old sedan

  • Skipped her dream Alaska trip

  • Bought the cheapest coffee at the grocery store

After decades of saving, she didn’t know how to spend without worry.

One small change turned that around — and you can make it too, whether you’re retired or still building your TSP.

Step 1: Build a Floor So You Can Dance on It

Your pension + Social Security + other steady income = your floor.

Once that’s strong enough to hold you, the rest of your TSP is for living, not just surviving.

When essentials are covered, every other dollar can fund:

  • A week in the mountains

  • Season tickets to your favorite team

  • Finally replacing that 18-year-old sedan

What to Do This Week: Write down your monthly “floor income” from guaranteed sources. Seeing your safety net makes spending easier later.

Step 2: Create a Fun Fund That’s Guilt-Free

If all your money sits in one account, every purchase feels risky.

A separate Fun Fund changes that — it’s permission in a bank account.

The amount doesn’t have to be big. It might be:

  • A slice of monthly withdrawals (if retired)

  • A small transfer from your paycheck (if still working)

What to Do This Week: Open a separate savings account. Name it “Fun Fund.” Move in an amount you’ll spend on something you actually want this month.

Step 3: Put Your Paycheck on Autopilot

In retirement, deciding how much to withdraw each month causes hesitation.

Automating your income removes that decision fatigue.

If still working, mimic this with a small “practice paycheck” into your Fun Fund each month — so spending feels natural when the time comes.

What to Do This Week: Retired? Set a fixed monthly withdrawal from your TSP to checking. Still working? Automate a monthly transfer from checking to your Fun Fund.

Step 4: Keep a Cushion for Peace of Mind

Markets go up and down. A safe cushion (1–2 years of essential expenses) means you don’t have to cut back when headlines get scary.

What to Do This Week: Look at your stable accounts. Can they cover 6–12 months of essentials? If not, start building — slowly is fine.

Step 5: Practice Spending Without Guilt

The shift from saver to spender is a muscle you have to exercise.

This week:

  • Retired? Spend a little from your Fun Fund on pure enjoyment — dinner out, a day trip, or that gadget you’ve been eyeing.

  • Still working? Do the same with a slice of your paycheck.

The amount isn’t important — the act of giving yourself permission is.

Your TSP isn’t meant to sit in the dark.

Build your floor. Fund your fun. Automate your income. Keep your cushion.

And above all — give yourself permission to enjoy what you’ve earned.

—FWR