It is hard to believe that 2014 is one-sixth over already. Thankfully, I have already made good on one of my annual resolutions and goals — the biggest of which is getting to bed earlier, getting up earlier, and managing my time more efficiently. The Rescue Time site has helped a lot with the time management. In particular, the daily timer tells me how many hours of productive time I’ve had that day, and it keeps me on track with my daily productivity goal.
This month, I plan to accomplish another one of my goals: Contribute to our 2013 Roth IRAs. The goal is to contribute the maximum amount, $11,000, which would be a stretch for us to accomplish this month. But it’s not impossible. We could do it one of two ways: (1) Sell one or two of our software products, which will boost our income this month anywhere from $3,000 to $15,000. (2) Dump our Emergency Fund into our IRAs. I project that our E Fund will have just shy of $10,000 in it by the end of the month, but it is possible for me to hustle a little bit more and bump it up to $11,000.
You may raise your eyebrows at the prospect of dumping an Emergency Fund into a retirement account, which may seem unwise given that many personal finance experts recommend having an Emergency Fund. However, we are only six weeks away from losing our opportunity to make our 2013 contribution to our Roth IRAs, and if we ever have a true emergency, we can withdraw the principal without penalty. In that sense, our Roth IRAs will be our new Emergency Fund. And it will take a true Emergency (with that capital “E”!) for me to withdraw from it. That, or a home down payment. But that’s a whole ‘nother blog post!
As they say on Marketplace, “Let’s do the numbers”:
Cash: -$1,882. One downside to freelancing is having irregular pay periods. My paychecks for last month’s work haven’t cleared our bank account yet. Otherwise, we would have broken even this month. (Fulfilling Goal #1 for the month!)
Credit Cards: -$1,230. Although I usually ignore this number because we pay it off each month, it does indicate that our spending decreased over the last month. Yay!
Loans: -$610. That’s right, folks: A $1,300 per month payment translates into $610 in principal reduction.
Investments: +$9,327. This is partly due to the market bouncing back after a January slump and us consolidating $4,500 from an errant Roth IRA into the Vanguard Roth IRA, so it can make us more money. I love the VTSAX fund at Vanguard and would put everything in it if I could.
Net Worth: +$9,285. I love an increase in net worth as much as anyone else, but I don’t think I can take credit for this — it’s mostly due to tracking a previously untracked Roth IRA and a bump in the markets. Although I don’t control the markets, I do control where my money is when the market goes up. So, in that sense I can take credit for the increase. Here’s hoping it keeps going up!
Progress on February Goals:
- Make ends meet with my income: SUCCESS! I was able to earn my keep by working a lot more hours for the attorney who offered me a job last week and earning $50 from Amazon — thank you, readers! In fact, I earned a little extra. That little extra will get dumped into a Roth IRA at the end of this month.
- Make one sale in our small business: FAIL! We have been in serious negotiations with one business all month, but the sale hasn’t happened yet. There is a lot of back and forth with closing a deal on our software product.
- Complete my basic will drafting training: FAIL! There is no excuse for this. But, at least with the salaried job, I can take the training during work hours.
- Buy malpractice insurance: N/A. I will probably take the salaried job, so I don’t need independent malpractice insurance.
- Make ends meet with my income. This should be fairly straightforward if I’m on salary. We haven’t worked out the details of the salaried job quite yet, but I anticipate going on salary by the end of the month.
- Finalize the IRA transfers. I started the IRA transfer process in January, but it is taking an unbelievably long time, with multiple sets of paperwork going back and forth. One out of three are done. Hopefully March will be the month when we have all of our retirement ducks in a row.
- File and pay our taxes. You will see a $7,000 drop in our net worth after we empty out our tax savings account. That’s why I have procrastinated on this one.
- Make our 2013 Roth IRA contribution. On April 15th, we will forever lose our opportunity to make our 2013 contributions. Because we can always withdraw the principal if need be, I usually push it until the last minute each year before deciding that, yes, we should dump our savings into our Roth IRAs. It helps to know that we’re not letting go of it for 30 years; that if something does come up, we will have the money to pay for it if we really need to. Then, after making the contribution, the money really feels untouchable and we work to build up our savings account as though the Roth IRA funds aren’t there.
What are your financial goals for March? How did you do on your February financial goals?