Tag Archives: Roth IRA

100 Meter Freestyle – A Savings Update

I wrote in What’s All the Saving For, Anyway? and in Hocus Pocus! Change My Finances! that our written budget is the foundation for setting financial goals.  We look at our weekly budget every Saturday evening for no more than 10 minutes to talk about upcoming needs and look at our progress with long-term goals.  Before we got in the habit of setting measurable goals, it felt like we were treading water with our money – hanging in there but never getting much forward momentum.

Start of 100 freestyle

Not treading water!

After reviewing our budget together, we set two key financial goals for the year.

1.  Increase savings by 30% by the end of the year – This goal is 97% complete.  We have been focused and also lucky that we haven’t had any surprise home repairs this summer.  Yes, I am looking over my shoulder as I type this…

2.  Fund each of our Roth IRAs up to the maximum, if possible – This goal is 50% complete. I am cautiously optimistic!  Payments made through March, 2014 apply to the 2013 tax year.

I read that Dave Ramsey will begin airing a video version of his daily radio show.  The show will be free and, I believe, streaming on the computer beginning this week.  If you want your money to swim the 100 Freestyle, you might want to get some Dave-style motivation and tune in!

A budget is telling your money where to go instead of wondering where it went

– Dave Ramsey

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Under the Spell of Retirement

I’ve come back from our trip to Santa Fe with renewed vision and focus on planning and saving for retirement.  Santa Fe turned out to be a place where we could really see ourselves spending time in retirement.  Our commitment to being debt-free comes first, so the only thing standing between us and a retirement of our choosing is having the savings we need.

Condo on the Plaza in Santa Fe - works for me

Condo on the Plaza in Santa Fe – works for me!

‘You can’t take a loan for your retirement’ – Mr. Saver

Mr. Saver is eligible for retirement in his mid-50s, approximately 15 short years from now.   This will occur just after our daughter would finish college.   We are saving as though he will retire in his 50s so that when the time comes that option is available to us.  I find myself running through a mental to-do list of items to put my attention on so that we are prepared:

  1. Remain debt free.  Interest on home, cars, and credit cards is money that isn’t available for savings.   “Rather to go to bed hungry than to rise in debt” – Ben Franklin.
  2. Budget money to maintain the things we already own, like home and cars, so that they last.
  3. Roth IRA – we should have a goal to fully fund both of our Roth IRAs every year from here on out.  For more on this, see my prior post.
  4. It’s all about the weekly meal-plan… keep planning meals at home based on sales and what pantry items are available.  Maximize veggies and beans, which are cheap and nourishing.
  5. Weekly budget meetings so that we are on the same page about where money should be allocated based on what expenses are coming up.  It’s July, so now is the time to think about saving for holiday expenses, and so on.
  6. Practice contentment.  We do not have the fanciest clothes, cars or house, but right now I value doing what we can to become financially independent so my husband can be in charge of when he retires.  Contentment helps keep me out of the mall!

It’s a lot of moving parts to keep an eye on!  What the trip to Santa Fe did for me, among other things, is enhance my vision of what we could create in our future.  Having a vision of what you want is one of the most important steps to take when you have a goal that requires sacrifice.    You can read more on creating a vision in my post “Imagining The Future.”

Do you have a vision for the future that is beginning to take shape?

What’s All the Saving For, Anyway?

You may have gathered from my weekly posts on ‘What I Did This Week to Save Money’ that we are very tenacious about trying to end our week with some surplus money to put back into savings, but what are we saving for, anyway?

We have two main financial goals for 2013 in addition to the usual budgeting practices of saving for kid’s college, participating in employer’s retirement program, meeting our charitable obligations, etc.

  1. Increase cash savings by 30% by the end of 2013.  We feel this is imperative.  We purchased a car with cash at the end of summer 2012 and need to replenish our savings.  We like our savings to be comprised of enough money for a major home repair or a car, plus some additional cushion.  This cushion is what keeps us from needing to borrow money.  For more thoughts on “saving like no one else”, see this post.
  2.  Fund each of our Roth IRAs up to the maximum contribution, if possible.  The Roth Individual Retirement Account allows US residents to put after-tax money into investments for retirement, and when you retire, you do not have to pay taxes on the money again (hooray! presumably your investment has grown quite a bit).  The maximum contribution is $ 5500.00 per year, per person, and you can contribute up until income taxes are due.  If we do not fully fund the Roths this year, we are OK with that because we feel the cash savings is our greatest need right now.  The Roth is only one of several ways we are saving for retirement.

So, are you going to sit around all summer saving money?

Summer Fun - The amazing T-Rex "Sue" at the Field Museum, Chicago

Summer Fun – The amazing T-Rex “Sue” at the Field Museum, Chicago

Definitely not!  We planned and began funding a vacation and other summer activities in our budget many months ago.  In terms of our budget, we are now starting to turn our attention to our money needs from August – December.  I will keep you posted monthly on how we are progressing toward our goals!