401K Max Challenge

Photo Credit: scottwills via Compfight cc
Photo Credit: scottwills via Compfight cc

Half the year is almost over and I haven’t put anything into my 401k retirement yet! How is that possible even? For the full-time job I started last year there is a 6 month waiting period and then I’m eligible on the first day of the quarter. July 1st is the day I can finally start contributing to my 401k with a 3% match! It feels a bit weird to be excited about that but I guess to each their own.

Now the biggest question is if I can max out my 401k this year with only 6 months to contribute! For the first 6 months out of the year I’ve been enjoying a larger paycheck than normal because of the lack of 401k. Having the entire year to contribute to the max limit is definitely something I can do, but with only half a year is it even possible? Well of course anything is possible but it’ll be a hard change and my income flow will be much lower. My husband just started a new job a month ago and he won’t be eligible for 401k until three months are left in the year. I think that I can definitely max out my 401k but I doubt he can with only three months for him. I’m going for it for sure! I’ll miss the extra chunk of disposable income but it’ll go a long way towards my future.

Benefits of a 401k
There are a few really good reasons why I’m doing this. First of all my employer matches 3% so I at least have to contribute 3% to get that! Free money yeah! There isn’t any vesting period but I do have to wait until the end of the year for them to put in the 3%. Secondly I need the tax benefits! California living is pricey and has a very high income tax. If I max out then that’s $17,500 that I don’t need to pay taxes on! Lastly, the most important reason, is that this all goes toward my retirement! Have to watch out for myself because I don’t intend to keep working until I’m 95!

Why max it out?
I really don’t have to max out my 401k but since I’m still young then the more money I put in now means the less I need to put in later. Work harder now and have more fun later! Haha. With compound interest working on my side then making a little sacrifice now will pay off in spades later.


I have one more month of enjoying a lot of disposable income and then there will be a sharp drop in that. I better enjoy that while it lasts! I’m going to go for it and max out my 401k this year!

Are you going to max out your 401k this year?

Hitting my Emergency Goal Amount!

Photo Credit: Geomangio via Compfight cc
Photo Credit: Geomangio via Compfight cc

I love it when I reach a goal and I feel great that I made it there! Then it’s onto my next goal to see what else I can accomplish! In terms of financial goals I just hit the amount I wanted to have for emergency savings and it feels great! I have a good number of short term and longer terms goals that I’m trying to hit one by one but now I can cross one off my list. I’m going to carry the momentum forward and continue saving to reach other goals!

It wasn’t that I didn’t have an emergency fund before but I wanted to beef it up and make it a nice fat emergency fund. Last year after buying a house I realized that I needed to have a bigger emergency fund in case anything went wrong. Fingers crossed of course and knock on wood that everything always goes smoothly. With house renovations and a few house fixes under my belt already after only a few months I know that things aren’t always smooth sailing. I have a lot more to consider when it comes to money and possibly a lot more to pay for when it comes to my house!

This is a good time to re-evaluate my goals and see how well I’m doing. Plus what else should I save for now since my money isn’t going into an emergency fund anymore?

Continue to save
Well the saving technically never stops but what I’m saving for changes. Emergency fund is now nice and fat so I can turn to other things like a honeymoon fund and a new kitchen. Technically for the honeymoon we’ve already paid for a portion of it but we still need to pay for the cruise and save some fun money. Our kitchen is also the original from more than fifty years ago and could use a total renovation. New appliances, cabinets, counters and possibly even some restructuring! That’s definitely something we can’t just drop money on right away and need to save up for.

I’m continuing to slowly put away 10% every month but if I have extra savings I could potentially put more into investments. Since I’m at the very beginning of starting this it could really help ramp it up and become a viable side income faster!

Extra mortgage payments
Not a fun option at all because this is such a long term goal and seeing the light at the end of this tunnel will take time. Every dollar extra we put towards the mortgage definitely helps us in the end and especially in the first few years since it chips away at the principal and the interest can’t pile up as much. Might as well put a little extra before we have kids to help us in the future.

Extra car payments
I really don’t have too much motivation since our loan is at 0%, but if we do pay this off early that’s a lot of extra freed up money that we can put towards something else! It is also a much smaller amount than the mortgage. If paid off early the only debt we would have is the mortgage.

Oh yes I do believe in rewarding myself a little when I’ve worked hard to reach a goal. Whether it be a nicer dinner than usual or allowing myself an impulse buy I’m for the indulgement. To be able to reach my financial goals I’ve been pretty frugal and budget friendly. Allowing myself to do something a bit out of the ordinary is something I look forward to after hitting a goal.


Were you able to hit any of your goals lately?

Watching my Investments

I’ve been doing something I know I shouldn’t be but it’s so hard to resist! I started putting money into investments as a long term way to build wealth through mutual funds. It’s something I’ve been wanting to do for a long time but I didn’t manage to do it until recently. I only have a small amount in there and I know that logically its going to take time to grow. I need to consistently contribute to my funds and if I check it every day it really won’t change much.

Things I don’t like so much about investing

There are days when it’ll seem like I’ve earned a lot and there might be days (hopefully not) where my investments have dipped. It’s still pretty early on and I’m a new investor so it’s exciting and a bit nerve wracking at the same time.

I’m not the only one I know who is doing this. My friend also started investing after I told her about how I did it and why and she’s been doing the same! At least we have each other to talk about it with.¬† With mutual funds for investments and retirement its really a long term plan and day by day wont matter. Checking your accounts is important but there is a lot of fluxuation in the market. To save my sanity I’ve been slowly making myself check only every so often. On the first week I checked nearly every single day and now I check maybe every few days. Well it’s also due to the fact that work is extremely busy and I haven’t had time to think about my investments!

As the months pass by I know I’ll eventually get to the point where I won’t be checking so often. It’s fun to see how much I’ve earned but it really doesn’t matter until the dividends get deposited into my account. Plus of course there’s the chance it could go into the negative. It’s a risk but that’s why I’m in it for the long term so that it has a chance to rebound if that every happens.

Things I love about investing so far

It’ll take time but statistically mutual funds perform very well. With the way I’m investing my money is spread across many mutual funds to lesson my risk. It’ll grow slowly but eventually after years of contributing I’ll have a nice chunk of change there. Passive income! Basically my money will be working for me if I keep going on this path.

It makes me really excited to see where this ends up a few years from and further down the line. I’m hoping that this can be a small source of side income eventually down the line. This will give my husband and I more options when it comes to working and perhaps when we start a family we can more comfortably spend less time working. If one of us doesn’t work for a little bit it’ll be a lot less stressful knowing we have an additional small side income coming in rather just having pressure fall onto one person’s shoulders.

Betterment was extremely easy to use and so far I love it! It was fast setting up my account and it’s easy to transfer money. It feels like an online savings account honestly and the biggest difference is that the money isn’t FDIC insured against loss. That and of course if this works I’ll make a lot more money than waiting for interest to pile up. I really wish I had been able to start this up so much earlier!


For now I’ll keep checking Betterment whenever I feel like but I know eventually the newness will wear off and it’ll become part of my weekly routine. It’s important to check up on my accounts but doing so every day is just a bit much. The most important to do now is to consistently keep adding to my investments and just wait for the market to do its thing.


Miss, your Credit Card got Declined

Photo Credit: Cola21 via Compfight cc
Photo Credit: Cola21 via Compfight cc

These are the dreaded words no credit card user ever wants to hear. It’s embarrassing when it happens and sometimes it shouldn’t have happened. I’ve actually heard this two times even though I have a high credit score and I pay off my credit card bills each month. I’ve only come close to the credit limit of one card once for a large purchase for my wedding and I keep a close eye on accounts. Unfortunately I’ve still had to experience that embarrassing moment of handing someone my card and having it declined.

Both times I was embarrassed initially and then angry that it had happened. I called my credit card company right away to see what had happened and it was because of the store’s machine! There was absolutely nothing wrong with my card and the credit card company hadn’t done something, it turns out that sometimes when stores swipe the card the information can get messed up. It was definitely a relief to know that it wasn’t anything on my end and that it wasn’t because someone had stolen my credit card number and racked up a huge bill. Still embarrassing though since it implies that my card was declined because I had spent too much money!

I would never want to be in the position where my card was declined because I had charged over the limit. Each of my credit cards has a limit way over what I usually spend in a month. It would be pretty crazy if I could max out those cards. Of course there are plenty of people who do this. These two incidents were unpreventable but there are ways to make sure you’re covered.

Stay far away from the credit limit
I know what the credit limit for each card is and I make sure to never get close to it. If I’m about to make a huge purchase then I make sure the card I would like to charge it on has a high enough credit limit. Another trick I do is to only use that card for that large purchase only. Little purchases can add up and if I don’t realize it then there’s a chance I could just nudge myself over the limit. It’s pretty uncommon that I spend a lot of money in one month though so I don’t get too worried. I pay off each balance every month so I get a clean slate.

Constantly check your transactions
I can do simple math in my head but I definitely don’t have a photographic memory to remember everything I bought. A day’s worth of eating and shopping can add up to quite a bit so it’s always good to check transactions to make sure you’re not nearing the limit. It’s also a good way to be vigilant about fraudulent behavior. The faster you catch it then the less harm it can do to you.

Notify the credit card company before traveling
This is an absolute must for international travel and a good idea for domestic. I have to say I don’t do this very often for domestic since I haven’t had any issues. Supposedly the credit card companies track your behavior and once they see something that doesn’t seem like it’s you they can put a hold on your card. In talking to a representative it can even be as little as 100 miles away from your usual location.

Carry more than one form of payment
It was just last Saturday that this happened to me! I went through three cards before I eventually paid. I first pulled out my Discover but they didn’t take that. Then my Visa got declined and finally my Amex was used. I also carry cash so that was my fourth option. At the least I try to carry one card and cash. If my card is ever declined then it’s good to have backups. Even more embarrassing than having your credit card declined would be not having a way to pay entirely.


Have you ever had your credit card declined?

Joining the Ranks of Investors

Screen Shot 2014-02-01 at 1.33.24 PMIt’s been less than a week since I finally took the plunge and started investing my money! It’s something I’ve been wanting to do but wasn’t able to get to last year. There’s the fear of losing my money and also investing has always been thought of as something that’s extremely complicated and tricky. The great thing is that there is a surge in making personal finance a lot easier to understand and do in the last few years. There are tools to help manage your budgets, track your spending, and now there are tools to make investments easy and simple.

I’m trying out a company called Betterment that allows people to invest without a lot of money and does all the work for you. Don’t need to research a ton of stocks and funds to decide which ones you can most safely invest in. It has a beautiful interface that’s pleasing to the eye and opening an account is pretty fast! It just took a few steps and now I’m an investor!

1. Sign up for an account
2. Link your checking account to Betterment, this can take a few days because they need to verify the account is actually yours of course!
3. Once the checking account is verified you can start transferring money!
4. Set up an automatic deposit of at least $100 per month in order to make sure you get the lowest fees possible.
5. Watch your money make more money for you!

The way Betterment works is that they charge a small fee based on the percentage of money you have invested in your account. For under $10,000 the fee is .35% of your investments. They have a selection of funds that they invest your money into. Your money is spread across all these funds to minimize risk. You set the percentage of stocks vs bonds you want so you can be conservative or more aggressive in your investments. They also have tools to help you reach a goal. If at anytime you wish to take money out it takes a few days to process and it goes back into your checking account. That’s all there is to it basically!

Investing definitely has its risks because nothing is insured and if you lose money then you lose money. To actually make money the majority of your funds will be in stocks with a small percentage in bonds. This means you’ll be at the mercy of the stock market and how well the economy is doing. Same thing as your retirement funds but without the benefits of not having to pay taxes on the profits until you start taking payments (of course this doesn’t apply to roth ira accounts). I’m not investing short term though and am planning on having these compound for years.

It’s a bit scary to think that I could lose money on this, but overall stocks usually go up if you go in for the long term. Our retirement accounts are all linked to the stock market also and during the beginning of the recession those accounts plummeted. They are meant to be long term though and since then they’ve gained back what they lost and more. I wouldn’t invest in individual stocks because it’s much too risky and I don’t have the knowledge. Investing in funds is a much safer option and being able to spread it across many funds is even safer.

If investing is something you’re interested in then Betterment is a good option to get started. This is something I’m doing in conjunction with savings though to spread out my assets. I’m following the traditional finance advice of not keeping all my eggs in one basket. I’m doing this so that I can make my money work for me and have some income in the future that I can touch. My retirement accounts are for when I retire, savings are for things I need in the next few years, and investments are something for the next 5 or 10 years from now.

Here’s the link in case you want to check it out!

How do you make your money work for you?