Wednesday, May 13, 2015

Why I'm Maxing Out My Roth IRA Every Month

As many of you savvy people out there know, saving for retirement is up there on the to do list, but not really a priority on an everyday to do list. We either have it automatically set up or have no clue what's really going on. Which for 20 - something's is a likely possibility. Who really wants to put money away for a future self you don't know at all?

Even with about 28k of debt (20k of student loans and about 8k left on the car loan), most people would think I would use the $5500 towards either one of my debts and get them wiped out quicker. That does sound financially sound and a great way to use my hard earned money in the short term. But after a lot of thought, I realized there were quite a few positives towards putting that big sum into an IRA each and every year.

It's not something I advocate for everyone, not only because everyone's situation is different but because everyone has different goals that they are trying to achieve. There are many people out there who would find being free from debt would allow them to lead better lives not only now, but in the future. Or some would rather have peace of mind of not being shackled to a creditor sooner rather than later.

Here are my main reasons why devoting that chunk of money a year makes sense to me:

#1: My job does not have a 401k. Yes, it kind of sucks, but a few months after starting my first real world job, I realized I needed to start saving. At the age of 23, I went to my local bank and had them withdraw a certain amount every week. It got me into the habit of not spending those $100 because they would never be seen. One day when I do have a job with a 401k, the extra amount taken out of my paycheck will be nothing to worry about because I've already become accustomed to living with less.

#2: Now is the time for saving and compound interest. THESE ARE THE YEARS! Not just for fun and having the time of our life, but for compound interest to take into effect. During these early years, those small pennies those first few dollars earn can turn into hundreds decades later. And not to sound greedy, but lots of money later on sounds pretty nice to me.

#3: It probably would have been going to things other than debt... Like dinners out, or fancy face creams that make my skin look like I never ever worry about anything... An extra $400 a month seems like a lot, but when its in your hands, it looks like the best night out since graduation.

I'm lucky to be able to allocate such a large amount of my income every month towards my goals and paying off my debt. But forcing myself at this moment to slowly but surely pay off my debt while funding my IRA is reinforcing my patience towards financial freedom. My small salary today will not wipe away all my debts, but in the long haul, it will make a considerable dent in the mountain. But along with that, each dollar saved right now, will be quite a few more later on.

What are your thoughts?

Saturday, April 25, 2015

The Next Quarter..

This past week has been very thought provoking for me. In a few weeks, I'll be turning 25, and that has startled me more than ever before. What I have done in my first 25 years on this Earth has been mainly milestones set by humans, but not a lot of it has been what I've been actively pursuing.

Now that I am conscious and aware of what type of person I am and what is out there, I can use that to my advantage and start partaking in activities that pique my interest and not merely arouse a satisfied groan for a job well done.

There are many aspects of my life that I have been neglecting, hoping that tomorrow will be the day to start, but in reality, today is too. Such as my health. I need to take care better of my body but also my mental health. Many of the reasons my body starts breaking down is because of my unhealthy eating habits due to higher than normal stress and less time to prepare meals in the morning because of how exhausted I was the night before. It's a never-ending cycle that can be broken with the right measures. All the equipment is at my disposal, yet I don't have the desire of the needed discipline to do it every night. Well, that is going to change!

Mentally, I need to get out of this rut of this is all that's out there for me. Yes, I waitress but that's not the end all be all. There are so many other careers out there that can provide me with the mental stimulation that I seek. But I'll never know if that apply button is never touched, not even once. So, taking time to really look at job postings not only in this area, but those around (and this is where the car comes in handy!) but physically taking the time to apply to them instead of keeping them open and considering all the reasons they would night hire me. Even if it means taking risks with other jobs that are far out there and pay a little less, maybe that's what is needed right now to get me back on track.

Financially, I need to hold myself much more accountable of my money on a daily basis. My debts have been going down at a reasonable rate, but I've been too willy - nilly these past four months with the small things. A drink out here and there has really started to add up four months into the year. My hope is to get January to April expenses all sorted out, take a really deep look into them and create a new budget to be tested May and June and the final version all set for July. This will give me the second half of the year to really make my money work for me.

The things I'm starting to appreciate are the home that the boyfriend and I are slowly creating. We are adding our personality here and there with small details that at times only we can understand why they fit. It's wonderful being able to look into our closet and see that we still have half of closet full of room. Our clothes have room to breath. We don't spend a lot of time or money on our appearance, but we appreciate other things that bring us together than divide us in separate directions. And I'd rather buy a couple ounces of tea over a sweater any day.

Everyday is teaching me what it is to be an adult in this world, but also a person, and a human. No one is perfect and failure needs to be a learning lesson. So hopefully I can take the failures and successes that are coming soon enough to heart.

Monday, March 30, 2015

Meaningful Spending

The past couple of months there has been a wonderful, new change in my schedule. After work a few days a week, I'll change into my gear and head over to dance class. Most of the girls are about half my age, but I don't let that perturb me in any way.

At first, I tried it out, paying for classes with a drop in rate. Then I bought a few classes at a time. Afterwards, I went all in. Slowly, new clothes were bought along with some new shoes and the transformation was only starting.

Yes, that money could be used towards paying off my student loans a bit faster. But in all honesty seeing that balance go down a little bit more wouldn't make me that much happier.

Life is about living, and not just for tomorrow but today. Being able to dance provides me with a joy that roots itself in my soul. I feel myself awaken in a way that daily routines don't allow.

There is no guarantee that in a few years that my body will still be able to perform the same moves, or be as graceful as I am today. Perhaps I won't have the time to dedicate once kids come into the mix. Now is the moment and today is the day, I'm not going to procrastinate on this one.

What things in your life are you not willing to give up even if it meant getting out of debt faster? And it can't be something small! 

Monday, March 9, 2015

Life Update...

What has grabbed hold of me lately you ask? If you wish to know, mainly it's been work (of course) but also getting myself in order. These past few weeks I've made a real commitment to myself of getting stuff done, and honestly, it's been a 180 degree change. Most days now are stress-free due to the fact most of the hard tasks are done before 10am or right after getting off of work. There are no dishes in the sink waiting for me and the pile up of house chores has almost disappeared. Some days, I feel like a new me...

Along with that, I've been working on picking up all the extra shifts possible without running myself into the ground. My goals for the extra money are to fully fund my Roth IRA but also to help pay for an upcoming vacation ( or 2). Looking at my planner (because this spreadsheet thing might be non-existent for a bit longer) it looks like things either will work out well (aka I'll saved for both of them) or not...

The Bf and I are also working on our home a bit more and finally got ourselves a TV stand. All the rooms are starting to look a bit more complete and less At-least-there's-furniture feeling.

I've also been focusing on drinking more water throughout the day and lo and behold my complexion has taken a turn for the better. Not only do I look more radiant and refreshed but I also have less acne. Hopefully soon I'll start feeling it on the inside as well!

Besides that, hopefully there will be a few more posts coming up during the month, along with my spending for January and February.

Any good things happening your way lately? Looking forward to the semi - Spring weather? 

Monday, February 23, 2015

That Time I Got Tricked...

Last week was a long and tedious week at work, which caused many tempers to flair. But what really set it off right was the oil change.

Yes, the car was due for an oil change and being the frugal one had a coupon and went to the location (which shall remain unnamed) early in the morning. My goal was to be able to get out in under an hour and give myself enough time for a bigger breakfast and some tidying up before heading off to a long day of work.

At first everything seemed to be going okay, they accepted the coupon and told me it would be only a small while. I sat down with my book, across from an older couple and then the wait began...

After an hour I went up to them and asked, how much longer and they said shortly, of course, everything will be finished...

And then it became an hour and a half...

And as we approached two hours my patience was for the most part worn thin.

After multiple times of pestering that I had to get going only then did they tell me they were done and the total.


Yes, I told them that this was too much and I had asked for a conventional oil change. Was I upset yes, but after two hours and only enough time to get to work without a minute to spare, there was nothing I could do but pay and leave fuming.

It makes me upset that my budgeted amount was totally ruined and they clearly took advantage of me and a new car. Honestly, it's a lesson learned which means from now on, the boyfriend will be coming with me to all future car appointments.

Have you ever had a frustrating experience that you write off as a lesson learned? 

Tuesday, February 3, 2015

Days off and Frugal Ways...

While working during the week, do you ever daydream what it would be like to explore your hometown or a neighboring city without the flock of annoying tourists? Or just even take a day off for the fun of it?

All that artwork and so little time...

Besides spending the whole day at the spa (because wouldn't that be awesome) there are so many exciting and frugal things to do that can occupy your whole day.

Exploring the local library and possibly checking out books: Maybe you'll peruse the new books section and make your way over to the magazines for awhile. You never know what you'll find there and what you will end up checking out!

Really study the artwork at your local museum: Many museums give discounts during specific days which makes it an even better deal! Spend time really looking into the depths of a portrait or analyzing every angle of a sculpture.

Taking a long nature walk: Perhaps discovering a new park has been on your to do list for awhile. Or your usual walk has been interrupted by a few inches (or feet) of snow. Take a peek at what is open and meander around for a bit. At least it will give you some fresh air and some much needed Vitamin D!

Trying out a recipe that requires that extra effort: Whatever it might be, you know it's the recipe you love making, but on almost any other day, it would be midnight before you sat down to eat. Take the time to make it extra special either for your or your loved ones.

Work on a project that has been left by the wayside: You know which one I'm talking about. That one exactly. The one that has been left on the side table in the spare bedroom that has not seen the light of day in over a year. Go ahead, just finish it off to check it off your checklist. The last 5% is the hardest but won't you feel a bit better?

Appreciate the time off: There are many people in the world who only dream of having a day off but have to work consistently to provide a home for their loved ones. Taking a few minutes out of the day to take a deep breath and find contentment is important.

Having a day or even a few days of relaxation doesn't have to be expensive. They can be even better if done during the week because you miss out on all the crowds.

What's your favorite frugal activity to do on your day off?

Thursday, January 22, 2015

Back from Vacation...

Ahh, a small respite from the ever demanding world is what the bf and I took and how needed it was. Luckily I had set aside some money for just this months ago and the room expense wasn't something that needed to go on the credit card (well it did, but then paid off!).

What was really important about this vacation was not only that it was paid for from a specified savings account, but that it was all about resting and recharging. Appreciating the down time and one another. We had been busy working five and six day weeks, eating whatever was available and probably not the healthiest. 

Yes, at one point I thought about it, and really questioned about using the saved up money towards a vacation instead of an extra payment towards student loans. And then those thoughts made me realize that life isn't just about paying off debt and working towards the next goal, it is about enjoying it. That is why 'extra' money was found for dance classes. These are the small wonderful things that make life worth living. 

It also made me realize the difference between cheap and frugal. There are days where we are actively working towards our goals by not buying lunch out and skipping on things we may not need. However, the pursuit of being cheap consequently makes you a miser along the way. Everything is an expense that can be sacrificed. Nothing is really that important, health and happiness are sacrificed. A balance has to be found in how far anyone should go for a healthy bank account. 

In the end it was all worth it. We were able to experience a wonderful quaint town, consume some of the best food, and not worry about a single thing, except when our next nap would be.

Have you ever thought about using a goal - specific account for extra payments towards your debt? Did you do it or did you go through with the intended goal?