My goal for 2007 is to “save” $48,000 in various retirement, education, and investment accounts.

Click here to read all posts associated with my $48000 goal.

Click here to read about my savings and investing goals for 2007.

Here’s my updated chart with detailed information:

As you can see, I’m going to miss my goal… by more than $20,000! Yikes, right? Well, it’s not nearly as ‘bad’ as it seems.

My primary mini-goals were to fully-fund our retirement accounts. I managed to fully-fund my 403b, my wife’s pension plan, my Roth IRA (for 2006 and 2007) and my wife’s Roth IRA (for 2006 and 2007). I also fully-funded my daughter’s ESA (for 2006 and 2007). Mid-year, I decided not to fund my son’s ESA in 2007. I am going to fund his ESA in 2008. I also put $1000 into my standard brokerage account. All-in-all, I was able to put $38,000 into various retirement / education/ brokerage accounts.

But, all did not go as planned. First, when I opened my wife’s Roth IRA, I “borrowed” $5000 from my ING Direct Savings account. (I wanted to fund the Roth for 2006 and April 15th was right around the corner.) Then, in October, our old van began to “die” – so we decided to use some of our savings and purchase a newer van. So, instead of ADDING $10,000 to my savings, I actually DEPLETED my savings by $12,000. (I’ve managed to ‘payback’ $3,000.)

There are two ways to look at 2007. On the one hand, I managed to fully-fund 4 retirement accounts AND buy a newer car with cash. On the other hand, I missed my original goal and I actually lowered my “savings”.

Personally, I’ll always view 2007 as a success. While I did not reach my goal, I reached several “mini-goals”. In 2008, I’ll work to rebuild my “savings” – and I’ll continue to fully-fund the retirement/education accounts.

I still have a month to go and I’ll be working VERY hard to rebuild my savings account. I’m a little bummed to see the hit that our savings took, but I’m very, very happy with the newer van.

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$48,000 Goal Update: 11 Months And 1 Van Later

I’m working towards saving $48,000 this year, which is 60% of our gross household income.

Click here to read all posts associated with my $48000 goal.

Click here to read about my savings and investing goals for 2007.

Here’s my updated chart with detailed information:

Explanation

My Roth = $8000 ($4000 for 2006 and 2007)

Wife’s Roth = $8000 ($4000 for 2006 and 2007)

ING (Repay $5000) = I ‘borrowed’ $5000 form my savings so that I could fully-fund the Roth IRAs for 2006.  I am in the process of ‘paying myself back’.

Next Step:  Open and fund ESA for my son.

(You can also follow my progress over at the No Credit Needed Network: NCN 2007)

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$48,000 Goal Update: 9 Months (Roth IRAs Fully-Funded!)

I’m working towards saving $48,000 this year, which is 60% of our gross household income.

Click here to read all posts associated with my $48000 goal.

Click here to read about my savings and investing goals for 2007.

Here’s my updated chart with detailed information:

Explanation: I ‘borrowed’ $5000 from my ING Direct Savings Account so that I could fully-fund my Roth IRA for 2006.  I’m in the process of ‘paying myself back’.  Since last month, I’ve managed to deposit $2000 into my wife’s Roth and an additional $1500 into my ING Directs Savings Account.

At this point, I should have saved $4000 per month for a total of $32000.  But, I’ve only managed to save $28,500, so I’m $3500 “short” of where I had hoped to be.  Why?  When calculating my budget for 2007, I made a major miscalculation and forgot about a $500 per month recurring expense.  Still, I pretty pleased with my progress and I’ll be working very hard to reach my goal by December.

(You can also follow my progress over at the No Credit Needed Network: NCN 2007)

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$48,000 Goal Update: 8 Months

My main goal for 2007 is to save 60% of our gross household income ($48,000) in various retirement, brokerage, and education savings accounts.

Here’s my current, updated chart:

(I’ve also updated my chart over at the No Credit Needed Network: NCN 2007)

I made a couple of adjustments to my chart.  Pre-Tax Retirement Goal was increased by $1000 and Brokerage Account Goal was decreased by $1000.  Why?  I recently made a few changes to my retirement contributions at work and I wanted my $48,000 Goal chart to reflect these changes.

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$48,000 Goal Update: 7 Months, A Slight Change Has Been Made

I recently adjusted the amount of money that I ‘take-home’ so that I can maximize my 403b contributions for 2007.  The maximum contribution amount for 2007 is $15,500.  In January, I elected to have $1000 per month contributed to my 403b, but in mid-June I decided that I needed to adjust my contributions.  So, my monthly paychecks for July – December will be $583.33 less.  ($3500 / 6 months = $583.33)

This additional contribution of $3500 should save me $875+ in income taxes for 2007.  (I’m in the 25% tax bracket.)  So, by maxing out my contribution for 2007, my total tax savings should be approximately $3825. ($15,500 * 25% = $3825)

I’ve already managed to fully-fund my Roth IRA for 2007 and I’m working on my fully-funding my wife’s Roth IRA.  By fully-funding multiple types of retirement account, I can diversify my investments AND my tax risks.  The 403b will grow “tax-deferred”and the Roth IRAs will grow “tax-free”.

I’m working very, very hard to save $48,000 in various retirement and savings accounts.  This adjustment was partially “planned-for”.  In other words, when I created my $48000 goal, I had hopes that I could adjust my paycheck and fully-fund my 403b.  So, this adjustment keeps me on track to meet my goal.

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Decreasing My Take-Home Pay So That I Can Maximize My Retirement Contributions

I’ve been making steady progress towards my goal of saving $48,000 in 2007. In the middle of June, I ‘borrowed’ a little money from my ING Direct account so that I could go ahead and fully-fund my Roth IRA for 2007. Now I’m working on rebuilding my ING Direct account. (Remember, no matter what my current goal is, I always leave enough money in my Emergency Fund account to cover 6+ months worth of expenses.) So far, I’ve managed to save $22,333.33 in various retirement and education savings accounts. That means I’m $1666.67 BEHIND where I’d like to be. (Halfway through the year, I’d hoped to have $24,000 saved… but, I’m not discourage, at all! Why? I’ve got 6 more months to work towards my goal, I’m saving more than 50% of my gross income, and I’ve yet to get on a really, really tight budget. All in all, I’d give myself a solid B, but I’ll need A+ work over the next 6 months if I plan to meet my goal.) Here’s a chart of my current progress:

As you can see, I’ve fully-funded my Roth and my daughter’s ESA. Pre-tax retirement accounts are automatically funded, so all I really have to worry about is 1/2 of my wife’s Roth, my son’s ESA, and then our Brokerage Account.

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$48,000 Goal Update: 6 Months

In March I opened two Roth IRAs, one for myself and one for my wife. In April I ‘borrowed’ $5000 from my savings account so that I could fully-fund both Roth IRAs for fiscal year 2006. The total contribution for both accounts equaled $8000. Since April, I’ve been working to replace the $5000 that I ‘borrowed’ from my savings account. Yesterday, I deposited the final ‘re-payment’ to my savings account.

As some of you know, I’m trying to save $48,000 this year, in various retirement, education, and investment accounts. As part of my goal, I want to fully-fund two Roth IRAs for 2006 and 2007. I’ve already fully-funded both Roth IRAs for 2006. So, I had a choice to make. I had to decide if I wanted to wait a few months to send a contribution to one of the Roth IRAs, or if I wanted to ‘borrow’ the contribution from my savings and then spend the next few months rebuilding my savings. Quite frankly, I enjoy the added motivation of building and rebuilding my savings. Once I have made a contribution to a retirement account, the money is “out of site, out of mind”. So, this will be my ’system’. I’ll build up my savings, to a certain point, make a contribution to another account, and then rebuild my savings. Rinse, repeat. Rinse, repeat.

By the way, if you are wondering why I don’t send in smaller contributions, instead of the full $4000 each time, it’s just a matter of personal preference. I make a one-time contribution to each account and then make a single, annual ETF purchase. I chose to fund “my” Roth IRA. Why? It was listed first on my spreadsheet. Next up? My wife’s Roth IRA and then my son’s ESA. Saving money rocks!

Resources mentioned in this post: The Orange Savings Account. Earn 4.50%. Great rates, no fees, no minimums

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I’ve Maxed Out One Roth IRA For 2007!

This year I am trying to save $48,000 (60% of our gross household income). To read more about my goal, and to see how I’m doing, you can click on the $48000 category.

After 5 months I have managed to save, in various types of accounts, a total of $19,500. Here’s a chart detailing my progress.

I spent the month of June ‘paying myself back’. Why? In March I ‘borrowed’ money from my ING Direct Savings account so that I could fully fund 2 Roth IRAs for the 2006 fiscal year.

Saving $48,000 in one year requires a $4000 per month deposit. So, after 5 months, my goal was to have $20,000 saved. I have saved $19,5000. So, I’m ‘behind’ $500. I’ll work hard in June to save an additional $500, over an above my original goal amount.

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$48,000 Goal Update: 5 Months

I thought I’d take a peak at my Roth IRA and see how it was performing.  My wife and I have four primary retirement funds.  I have a 403b through work, she has a pension plan through her work, and we both have Roth IRAs.  I’d breakdown my investment philosophy thusly:

Pension Plan:  My wife’s plan will provide guaranteed retirement income, so, no real worries here unless she were to change jobs or get sick.

403b: I’m pretty aggressive with my 403b investments.  I invest in a small cap mutual fund, an international growth stock fund, and a REIT.

Roth #1 (My Wife’s):  In this account, we stick to “safe” index-based ETFs.

Roth #2 (My Roth):  In this account, I invest in single stocks, trying to buy stocks that have a dividend and / or appear to be “good values”.

(I’m not an investment professional, and I would NEVER give investment advice.  I’ve read several books on investing, and every time I read a book, I think, “NOW I understand!”.  Then, I read another book and I completely change my mind!  The above breakdown represents what I’m doing TODAY.  By tomorrow, I may change my mind and become more conservative, or, conversely,  I might change my mind and become much more aggressive.  Honestly, my main goal at this point is to save as much as I can, upfront, and learn as I go along.

Here’s the current chart for my Roth IRA, Roth #2:

As you can see, I purchased 60 shares of PEP (Pepsico) in April.  Since then, the price of the shares has gone up, which is always a bonus.  I’ll update this account, and the others, from time to time.

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Taking A Look At My Roth IRA

I have big plans for 2007. I am trying to save 60% of our gross income. While our pretax retirement contributions are made on a monthly basis (by our employers), I like to focus on our other investment (or savings) accounts, one at a time. I think of it like a debt snowball in reverse. Confused? Here’s a breakdown of our year, based on when I’ll be focusing on a particular account:

Jan: Daughter’s ESA For 2006
Feb: Daughter’s ESA For 2007
Mar: My Roth IRA For 2006
Apr: My Wife’s Roth IRA for 2006
May: Repay My ING Account
Jun: Repay My ING Account
July: My Wife’s Roth IRA for 2007
Aug: My Wife’s Roth IRA for 2007
Sep: My Roth IRA for 2007
Oct: My Roth IRA for 2007
Nov: My Son’s ESA for 2007 / Brokerage Account
Dec: Brokerage Account

Each month, instead of putting small amounts into each account, I focus on one, lump sum deposit into a specific account. I have prioritized my schedule based on the accounts that I “must” fund to the accounts that I’d “like” to fund. So, in 2007, I’ll definitely fund our Roth IRA’s, probably fund our Son’s ESA, and hopefully fund our Brokerage Account. Once an account is “fully funded”, I use the funds in that account to purchase shares in an index-based ETF.

Instead of putting “a little here and a little there”, I choose to focus, each month, on a specific investment (or savings) account. I am motivated by the idea of completing a task, putting that task “behind me”, and moving on to the next task. For instance, my Daughter’s ESA is fully-funded for 2006 and 2007. I will not have to “think” about here ESA until January or February of 2007. So, I can put it “out of my mind” and focus on another account.

If I get ahead of (or behind) schedule, I’ll simply adjust my dates, but not the ORDER in which accounts are to be funded. (While waiting for the lump sum to “build up”, I simply keep the money “sitting” in my ING DIRECT(affiliate) account, accruing interest.)

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I Only Focus On One Account At A Time