Apart from doing my taxes, my favorite thing about this time of year is the smug and self-congratulatory feeling I get from maxing out my 401(k). No doubt I am a little nutty about retirement savings, and I feel very lucky and grateful to be in a position where I (1) have a 401(k) and (2) have the ability and wherewithal to max it out.
To be sure I don’t take that luck and gratitude for granted, I take it to a bit of an extreme. I make a point to max out my 401(k) as early in the year as possible, a habit I started when I began my “real” (cough cough) career in 2007. At that time, my employer would allow contributions of up to 50% of my paycheck, so that’s what I did. My current employer does not cap contributions, so I’ve opted to contribute 100% of any bonuses and 50% of my salary.
Whaaaaa? Why do I do this?
- I’m impatient. This way I’m done with my 401(k) contributions by summer, so I can rest easy by the lake.
- I’m greedy (when it comes to savings). Contributing such a high percentage of my income forces me into a greater than 50% savings rate, a habit I (mostly) maintain even once I’m done so that I can keep barreling towards FIRE.
- I like getting a 50% raise several months into the year, every single year. Ok, it’s not a raise, exactly, but having a little more cash on hand for the rest of the year can come in handy. I don’t increase my day-to-day spending after my 401(k) contributions are done, but it’s nice to have a cushion for summer home improvement projects and travel.
- I believe in investing early. To put it eloquently, markets go up over time, so the more time your money has to go up, the more up it goes. There are different philosophies about investing lump sums at once v. dollar-cost-averaging (investing the same amount over a longer period of time to average-out market fluctuations) and there is no question both methods work well. I dollar-cost-average my non-retirement investments by automatically investing a certain amount with every paycheck (an amount that goes up once my 401(k) is done!), but for long-term retirement savings, the earlier in the better. (If in doubt, check out this calculator.)
- I can put my FU money to use guilt-free. On days when I’m feeling like I should just walk away from my job, one thought that holds me back is failing to take advantage of my great 401(k) plan. If I can max it out early in the year, that restriction evaporates into several months of potential no-strings-attached freedom.
So what’s the first thing I do when I’m done with my 401(k)? Max out my Roth IRA, which I’m pretty sure stands for I’m Really Anxious about retirement.
It’s been about four months since I started my capsule wardrobe experiment. I’ve gotten a lot of questions, such as how do I decide what clothes to keep? How do I decide what new clothes to buy? Don’t I get bored? Happily, there are an equal number of questions I have not asked myself over the last few months, such as what should I wear today? How do I have so much stuff in my closet yet nothing to wear? Where the @%$# are my favorite pants?
Based on this last bit if nothing else, I am calling the capsule experiment a tremendous success. Continue reading Capsule Re-Cap(sule): How my New Wardrobe is Going
I can’t believe it’s been a month since my last post! Time to declare failure on the ole “publish once a week” goal for 2016 … ha! Oh well. I feel A-OK about this.
I had high hopes that my recovery and attendant absence from work would entail lots of activity on the personal front. Alas, and I’m sure not surprisingly to any of you who have been through something similar, no. I’m not sure what I’ve even been doing, but it’s like being in a weird time warp where the days slowly stack on top of each other like a house of cards and then suddenly all disappear at once. I’ve been working remotely the last couple of weeks, which has been great for turning the brain back on, but it’s meant than any other entertainment has gone out the window — I haven’t even binge-watched a new favorite tv show, so I have no new favorite tv shows to show from this experience . . . and that’s fine.
One interesting/not-interesting thing that happened over the last few weeks is that I completely lost interest in, well, pretty much everything. When I paid my monthly $4 hosting fee for this blog, I actually thought seriously about just throwing my hands up and saying poops it all, why bother, this is dumb, I should just quit, I do not need to be spending $4/month on something I don’t even want to do when I have nothing to do . . . thankfully, I didn’t quit, paid the bill, and here I am back at it again.
Over the last six months I’ve been here, I have generally enjoyed having this blog as an outlet/journal/dump for my thoughts and as a way to keep me accountable to myself and my financial goals. I have realized, though, that it doesn’t need to be work and I don’t need to force it. If I need to take a month off, that’s ok, because I’m only doing this for me anyway, and the beauty of that is that I can do whatever the hoot I want with my time and energy — just like, say, the whole point of this FIRE (financially independent + retiring early) idea that I’m here for anyway . . . funny how that works!
So, yay, here I am. January financials and a couple of book reviews coming soon. I guess I haven’t been completely idle . . .
In addition to my terrific, specific, and mostly-achievable goals for 2016, I decided to add a new twist to the mix by also picking a “word of the year” as my mantra. That word? Patience.
It’s a virtue, they tell me, but not one I’m intimately familiar with. I like to Get. Shit. Done. And when I’m ready to GSD, it’s hard to wait. But this year, I’ve got a lot of waiting to do, starting now — I get to be not only patient, but a patient as well. A patient patient, I hope! Continue reading Being Patient
Ever since I was a kid I’ve been very goal oriented and weirdly motivated by the endorphin rush that comes from checking something off my to do list. So it should come as no surprise I enjoy this time of year — reflecting back on what goals I accomplished the past year, kicking myself with a few face punches (metaphorical) for the ones I didn’t, and looking ahead and making lots and lots of lists for the coming year.
2015 was a mixed year for me, though I would say I leave it with a sense of generally pretty spectacularly amazeballs awesome — overall, financially, it was a very solid year, though not without some important lessons. Personally, it couldn’t have been better — Sweetie Pie moved closer to me after being in a different city for two years; I traveled a lot and saw many, many old friends; I started to feel like my house is becoming my home; and I started exploring all sorts of new pursuits outside of work (like this blog!), and somehow managed to achieve some balance of not feeling perpetually “busy” (I chalk that one up to good old fashioned gratitude!). Professionally, however, last year was a disappointment — I had some tough days at work and have been embroiled in some deep soul searching about where I might want to go next, how to get there, and the best recipe for lemonade in the meantime.
In terms of my specific goals, here’s the rundown: Continue reading So long 2015, Onward and Onward to 2016!