Baby Steps...
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Baby Steps...
| Wed, 08-03-2005 - 12:40pm |
Hello!!
Well I've read all your posts and I've done some thinking.
| Wed, 08-03-2005 - 12:40pm |
Hello!!
Well I've read all your posts and I've done some thinking.
Wow, Kim,
Thats Great! I think you have made some excellent choices, and in the long run you will be much better off financially. The refi was just a horrible idea, and this way you will learn life long lessons regarding debt. Which our priceless if you ask me.
Please continue to post and participate in the Snowflake challenge. I think they are crucial to keeping you on target to your goals. But I know you can do it. Think of all the things you will be able to pay cash for when you are no longer saddled with monthy payments...UGH!
Another thing I did was post each of my steps, and then I printed them out and hung it next to my desk. I do not want to forget my goals and get lost again on the way.
Shannon
Shannon
Kim,
This sounds like a great start. Thanks for updating us. It sounds like you've got a solid plan in place, and I look forward to hearing from you as you move closer to that light at the end of the tunnel.
:)
Blessings,
Heather
"Oh yeah, and if possible I'm going to keep contributing to our 401k but if we and up needing that money, then we will fit it in again after the cc's are paid off."
It looks like you taking some good, useful steps to control the situation. Not meaning to overwhelm you, but if you want to retire comfortably, contribution to retirement accounts, such as 401-K, IRA's, is not optional. It is especially important when you are young. Consider the following two scenarios:
1. If at age 25, you start with $500 in account that earns 8%. You put $150 per month into that account. At age 45 (after making contributions for 20 years), you stop putting money in it and just let it sit. After another 20 years, when you reach 65, you will have $450,334 in that account.
2. If you do not start investing in retirement until age 35, and again, start with $500 in an account that earns 8%. This time you double the amount and put $300 per month in this account until age 65 (which means you keep making contributions for 30 years). At that time you will have $455,556.
The difference between the final amount of money is only $5,000 or so, but in the first scenario, you only have to invest $150 per month for 20 years, whereas in the second scenario, you have to invest $300 per month for 30 years. That extra 10 years of "head start" makes a HUGE difference! So keep putting the money in retirement savings - even if you can only afford $50 or $25 a month, but don't delay.
Sorry, off my soap box now.
I agree with minisinge to a point. But I do want to point out that if you're having trouble meeting your basic responsibilities, then retirement savings can wait a few months or even years.
What good, after all, will it do to have $500,000 in a retirement account if, at retirement, you still have a $600,000 mortgage and ccs maxed out? Your retirement account won't yield a large enough income to cover all your debt payments, let alone give you a good lifestyle.
So, yes, if you can continue to contribute (especially if your company matches your contributions), by all means do so. But if in order to continue paying your bills and living within your means you have to put off retirement savings by a few months or years, then get your financial house in order and then start saving.
:)
Heather
Thanks.
Point well taken. It is just that when I have that X amount taken out of my pay check and goes directly into the retirement account, I don't even miss that money. At the same time, if that extra money is available, I can easily blow it on things I don't really need.
Yes, by all means pay off the credit cards, make decent progress on the mortage, etc. But bear in mind that very often when people retire (and when the children are gone), they don't need that large a house anymore, and may trade down and get some additional cash out of the process.
Yup, I agree with this. And it sounds like she's getting a good company match as well, which is basically free money and a significant portion of many peoples's compensation package. So don't throw it away!
And, yeah, it's so much easier to say "bye" to the money when you never said "hello" to it in the first place. I am a big proponent of paying yourself first. Every penny that comes in to our account is accounted for before it goes out again--everything is given a name, and when we run out of money for one thing, we either have to do without until the next pay period, or we have to decide what other thing in the budget is a lower priority and can be sacrificed for that thing.
So money doesn't just run through our fingers any more. But those retirement savings are definitely high on our priorities, especially because we too get a good company match.
Good point.
Heather
Hello everyone and thank you!!
I am going to continue to post because I find myself up and down because of this situation.
If it is indeed only $5, maybe you could "splurge" on that. Maybe it pays for itself when you stay home and watch TV instead of going out shopping?
Oh, and don't be too hard on yourself when it comes to grocery. Cut out the chips, ice-cream, etc., but even though fresh fruits and veggies are sort of expensive, it doesn't make sense to sacrifice your health. Somebody once said to me: you either pay the grocer or pay the doctor, and the first options is more palatable.
Keep your chin up - you can do it!