Mission: Roth IRA 2013/2014

As of December 31, 2013, I’ve only put $993 in my Roth IRA for the year.  Guess what though?  You can continue to contribute and have it count for 2013 until April 15^th, 2014!  I know that yesterday I said my plan of attack in regards to my financial priorities was to stick all my money into my smallish loan, then hit the Roth, but I’m actually going to do minimum payments on my loans and stick all of my money into the Roth!

I really would like to max it out at $5,500.  To do that, I would need to contribute about $1,127 every month (including April).  What a bummer that all of that money, about 43% of my take home pay and 29% of my gross income, is going to be untouchable for years and years to come, but I don’t think I really need to reiterate AGAIN how much can be gained in the long term by giving up this money in the short term.

Regardless, new mission:  Contribute $10,007 to my Roth IRA (2013 remainder and 2014 contribution).

I’m wondering if this is a completely crazy feat with everything else I have on my plate.  Oh well; whether I manage to hit all of my targets or not, I know that I’ll have worked hard to keep my eye on the ball and make it happen!

Do you try to max out your IRA?  Why or why not?

Does Order Really Matter?

Now that I’ve decided that I definitely want to max out my Roth IRA, I’m debating what order I should pay it out.  Should I pay the minimums on my loans and put as much as possible into the IRA until it’s maxed out (probably sometime in July) then reallocate the money from the IRA designation to my loan?  My other option would be to spread the $5,500 over either 12 months (payment of $458/month).

I don’t know if the interest accrued on the loan would be balanced out by the growth of my IRA in that early 2014 time frame.  I would need to know exactly what I’m invested in and how my portfolio would do in that time.

Honestly, I think it’s six of one, half a dozen of the other in this situation.  Do you have any advice?  Do you max out as quickly as possible or try to spread it over a longer time period?

Paid Vacation Time

The paid vacation policy in my office goes something like this:

1^st FULL year: 2 weeks (80 hours)

10^th FULL year: 3 weeks (120 hours)

20^th FULL year: 4 weeks (160 hours)

(Because I began working here prior to July 1^st, I negotiated a week of vacation (40 hours) for myself for 2013!)

The great thing about this system is that I could take the whole shebang at once, i.e. use 40 hours over a week in the middle of July to go to the beach OR I could use a few hours here and there, i.e. 10 three-day weekends where I take Friday off.  (I only work four hours on a typical Friday.)  However, I would definitely have to stick with the company for a LONG time to get some real vacation benefits.

I have yet to use any of my 40 hours, but am trying to use them up over some various things around Christmas time.  If I don’t manage to use all 40, they get “paid out,” meaning I just receive the extra moolah in my paycheck.  Also, since we’re paid hourly, we can take unpaid time off, which is awesome when you have a doctor’s appointment and come in an hour late, but not so awesome when your bank account receives that week’s deposit.

How do you use your vacation time?  Does your company let it roll over or do they pay it out?  What’s their policy on unpaid vacation?

Over Budget, Womp Womp

With all of the great sales during this time of year, I ended up going over my clothing budget.  Bummer that all of my money is going to retailers but awesome that all kinds of new stuff will be mine soon!

While I’m excited for my new shipments to arrive soon, I’ve had to rearrange December’s budget to accommodate my lack of self-control.  Luckily for me, this doesn’t mean I can’t eat from Christmas until New Year’s.  It just means I may only be able to double my student loan payment instead of quadrupling it.  I know that this is a total first world problem and I’m so grateful that this is my biggest financial dilemma this month.

Do you ever reallocate your budget mid-month?  What happens if you overspend in a single category?

Christmas Gifts to Myself! ... For Everyone Else

I just finished putting together my budget for Christmas gifts and was pleased to see that even without the budget, I still did pretty well staying within my targets.  This made me wonder how other people budget for this, if they budget, and where the money comes from.

I’m lucky enough that I get to see most of my close family right around Christmas time and can give gifts in person.  Others in my life are a little harder to shop for since they live farther away and I rarely see them during the holidays.

I’ll let you in on my secret for those gifts; I used my Discover Cashback Bonus dollars to purchase gift cards to 1800baskets.com.  It’s awesome, because now these gifts are like freebies.  Don’t get me wrong; this has been my intention since last Christmas and I’ve had to be smart about my purchases to reach my cashback goal.  I make sure to always sign up for the three-month long 5% back deals and I try to be diligent when ordering online to see if Discover will give me a cashback bonus if I bypass Discover.com.

This year that added up to about $130 to spend on gift certificates.  The other awesome thing about this plan is that I can spend $80 of my bonus, but receive a $100 gift certificate.  It’s almost like my free money is getting me more free money if I redeem it wisely.

Do you take advantage of deals like this?  When do you use them?

Multiple Mini-Payments

For those of you who have been following my loan repayment posts, you’ll see that I actually make multiple payments on my loans every month.  There are a few reasons I do this.

1.      There is a reduction in the interest rate if I set up automatic payments.  I have these set to the minimum for each month so that I don’t ever forget to pay and mess up my credit score.

2.      I also don’t know how much I’m going to contribute to my loans (and the breakdown between them), so I keep the automatic payments low to give me more room to change things later.

3.      It makes me really sad to see $1,200 fly out of my bank account on the 30^th, but I don’t mind so much if it leaves in four $300 payments.  I realize this is all in my own head, but, again, it gives me more flexibility as I go through the month.  (Note: I later realized I also am paid biweekly.  Sometimes it’s best to stagger my payments a bit so that I don’t overdraft or have to switch e-fund money into my checking account and then later switch it back.)

I do the same thing with my Discover card.  I’ve found that it helps me to truly keep track of what I spend if I pay it off more regularly and I’m not going to drain my entire bank account in one go.

Do you pay your bills in one installment or multiples?  What do you see as the benefits?

Is Cable TV Worth It?

This month I’ve started paying for cable TV service.  Since I live with my parents, this means for the TV in my bedroom and it also is fairly cheap ($30/month).  I found that some of my shows (things on Lifetime and Bravo, I know I watch crappy TV) weren’t easily available for streaming legally online and I really hated missing out.

I tend to watch a lot of things on Netflix and Hulu and have found that I’m not really using my cable TV service as much as I thought I would.  So far I’ve really only used the DVR a little bit and gotten some workout videos for no additional cost on demand.

Do you pay for cable?  How often do you use it and do you think it’s worth what you pay?  If you don’t have it, then how do you watch your shows?

Net Worth November 2013

November was a great month for a couple of reasons:

1.      It was a three paycheck month.  Even though I took a couple hundred dollars out to help buy Christmas gifts in December, I still managed not to cut into the third paycheck at all and could put the entire thing (plus more!) toward my student loans.

2.      Although I went away for two weekends, one was with four other family members so my costs were reasonably low and the other was for Thanksgiving.  My mom has a certain number of personal miles for use on her company car, so we took that.  Regardless of whether she maxes out those miles, she is charged for them, so that trip cost me nothing in gas and almost all purchases were Christmas gifts.

Let’s see how I did.

·         November:

o   Assets: $7,642.06

o   Liabilities: $(24,998.60)

o   Net Worth: $(17,356.54)

o   Bottom line: + $3,399.86

What an awesome month!  In total I contributed $2,692.21 to my loans (blew away the $2,000 goal!) and achieved a net worth of well above the $(20,000.00) I set for myself.

·         November GOALS:

o   Contribute $2,000 to my loans

o   Achieve a net worth of $(20,000.00)

While December is a holiday month and I will probably be receiving gift money from some family members, I am not budgeting that into my goals at all.  I will probably see what comes in and then find a balance between adding to my Roth IRA, paying down my loans and buying myself some tangible gifts.  Here’s what I hope to do:

·         December GOALS:

o   Contribute $200 (instead of the usual $100) to my Roth IRA

o   Achieve a net worth of $(16,000.00)

NOTE: My company does a 401K match, but I do not include that or any growth in that account in my net worth updates.  This is because I don’t have access to the account on a daily basis.  When a statement comes in, this will all be updated with true-to-life values.  Additionally, my Roth IRA isn’t invested in anything at the moment.  I am hoping to up my contributions in the new year to accomplish two things: (1) max out 2014 contributions at $5,500 and (2) bring my account up to the minimum value to start buying into some different mutual funds.