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Balancing goals

May 21st, 2008 at 06:27 am

I sat down and realized today that maxing out one's IRA contribution is extremely important, even if you are trying to pay off debt.

Reason being, I could pay off our credit card this year. But I also realized, that because I can only contribute $5K a year to my IRAs, I miss out on a valuable opportunity to save this year.

So I need to acknowledge the strides I've taken this year to pay down our debt. At the beginning of the year we owed $14K on our credit card and have now paid it down to $9500 within the first six months.

I also hope that in starting to save, when our debt is paid off - we'll be used to saving so continuing to do so will just be natural.

I'm thinking of also increasing DH's TSP contribution to 10% of his pay (its currently at 5%). So that would increase our monthly savings amount to $1150/month from the $645/mo between EF and Retirement accounts.

6 Responses to “Balancing goals”

  1. creditcardfree Says:

    Not a bad goal. Increasing the TSP will also reduce your taxable income!

    Balancing goals is the hardest part we have, too. I seem to want it all at the same time. I'm still adjusting to Captain's pay. Suddenly, there's more money than we have ever earned...where to put it and which goal comes first. It's hard to tackle several goals at once and feel like we are making progress on any one of them.

  2. Joan.of.the.Arch Says:

    I did not know what you meant by TSP, but think I found out at http://www.tsp.gov/

  3. merch Says:

    Sometimes it is better to focus on one goal then stretch yourself too thin.

    If you paid off your debt this year, you could still contribute to your 2008 Roth in first quarter in 2009. Just something to think of.

  4. Petunia Says:

    Balancing is hard. . . sounds like you've worked out a plan that will work for you.

  5. Caoineag Says:

    I am a big fan of starting saving while still in debt. Mainly because I know myself well enough to know that I need to learn the habit of saving if I ever want to change my financial habits. In fact, I hate to admit this, but we never made alot of progress with the debt until after we started saving.

  6. creditcardfree Says:

    Arch...you got tsp right. It's the government's version of a 401K. Not many choices, though.

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