Wednesday, January 20, 2010

One Done, Five To Go

(1) Max out 401ks - $33,000
(2) Max out IRAs - $10,000
(3) Prepay mortgage - $1200
(4) Add to baby fund - $3500
(5) Add to emergency fund - $7000
(6) House/Furniture fund - $3000 [Completed!]

Total - $57,700

(1) - $600 (1%)
(2) - $500 (5%)
(3) - $100 (8%)
(4) - $100 (2%)
(5) - $200 (2%)
(6) - $3000 (100%)

Total - $4,500 (7%)

Three weeks into the new year and we've got one goal completed. Clearly, I am desperate for a new couch. We are 1% ahead on our savings goal. Whoo-hoo!

In order to reach our goal of saving $57,500 in 2010, we have got to save $1100 a week. $1100 a week seems like a lot of money, it is a lot of money, but half of that is $630/week in 401k money. 401k money is less painful because the bulk of it is pre-income tax (we do put some of our 401k monies into a Roth 401ks [after-tax]). 401k money is also less painful because we never see that money, we never take possession or control of it, rather it is deducted from our pay-check before we get paid so the temptation to spend it is reduced.

Our prepayment on our mortgage is set up for auto-payment so I can pretty much forget that one and know that it will be completed. The emergency fund auto-transfer is set up as $200 per paycheck for a total of $4800 for the year. The baby fund auto-transfer is set up as $100 per paycheck for a total of $2400 for the year. In order to meet these two goals we will need to increase the auto-transfer or throw extra* money at these two goals during the year.

We do not have an auto-transfer for the IRA, normally I fund our IRAs by throwing extra money at the IRA as early in the year as possible. We also normally use the bulk of our tax refund to fund our IRAs.

*Salary - 401k contributions - auto-transfer savings - recurring bills - allowance = "extra money."

1 comment:

Daddy Paul said...

Wow What a set of goals. Even if you max your 401K's be very proud of yourselves!