I Need Your Advice!

Things are going relatively smoothly these days, despite L starting kindergarten in a different school than expected, my starting a new job, commuting as a family for two hours a day, going through the process of selling a house, and navigating the process of renting a new house. (Let’s not even discuss packing right now, ‘k?)

In the process of moving to this new job, the HR folks told me that certain types of Leave days don’t transfer, though others do, since I’m moving from one state institution to another. I jumped through the required hoops, and the HR folks from my former job confirmed that I’ll be receiving a paper check at the end of the month with my pay-out from those days that didn’t transfer. I figured it was at least worth checking if they knew a round-about number of what I should expect in that check. DUDES. $3000+! 

Cue the cheering.

Now cue the head-scratching.

What to do with it?

My first instinct was: “Put it in my Roth IRA!”

After all, that’s why you save your leave days when you’re working – you want them to pay them out when you retire so that your annual salary goes up in that last year, which (supposedly, and from what I understand) then makes your retirement larger. So, it makes sense that put this where it belongs – in retirement.

I’ve already complained about my retirement in the past. I have two accounts: one is a TIAA-Cref Roth IRA (which I opened when I rolled over my retirement from another state when we moved back in 2004 or whenever that was) and one is my state retirement fund. 

TIAA-Cref Roth IRA: 19,765.
State Retirement: 15,440.

These are not great numbers, and I’ve been wanting to max out my Roth – and that was a goal on my list.

But……. Now I’m second-guessing it.

We have big plans to go to a conference in Strasbourg, France in July 2015. That’s not a whole lot of time to save up $5,000 (or more – I’d rather have more than we need saved up than come up short, natch). (I did just open a travel card with Chase for this purpose, and they gave me a huge credit limit! Yowza. More on this in another post!)

Other big savings plans include:
– downpayment (we’d like to have 20% or a similarly high number to get a good rate – and if we didn’t have to pay PMI, that would be icing on the cake)
– new (used) car (H wants a Tesla! I laughed at first, but I have to admit I may have been mistaken. After watching Cosmos…. well.)
– emergency fund

Those are far in the future, of course (except for the emergency fund), and we have TONS of student loan debt still!

So:
Option 1: put all of the $3300 in my Roth IRA. (No worries about maxing out my contributions for the year – I seriously only put in $30 a month!)
Option 2: put it all towards the largest student loan we have to minimize interest
Option 3: put it all in savings (divide it up as needed – perhaps putting it all in the travel fund to not worry about eventually having to fund part of the trip with credit cards) – this would have the added benefit of helping us out when we clear out a lot of our savings to move in a few weeks (deposit on rental, first month rent, paying the movers)
Option 4: Divide it up in some way between those options

I feel like probably the safest method is to divide it up (option 4) BUT THAT IS SO UNSATISFYING. Not the smartest, but the safest. Especially since it would involve saving the money to have if needed.

It’s basically “found money,” though, and I think the “smartest” method would be to either invest it in the Roth so it can grow for me (the earlier the money goes into the investment account, the better and smarter it is!) or pay down some of the student loans. Then it disappears into the abyss and it’s almost like it was never here at all. At least it gets us closer to accomplishing a goal.

Why is it that if you do get a windfall, it never seems like enough when you are in debt and behind on saving? I’ve read one or two blog posts recently that reference the challenge of debt-freedom stress. One might assume that without debt, you’d feel free and happy; however, whether it’s due to a feeling of needing to play catch-up with retirement and savings since debt pay-off has been your financial focus or just the fact that the kind of people who tend to work really hard to pay off debt are going to be very focused and aware of money (no matter whether it’s debt payments or growing investments), people tend to still fret over money.

Now, I implore of you…. please tell me: what would you do with that $3300 if you were in my position (given what you read above)?

P.S. When we make a little money off the house sale (maybe $6K?), that’s already earmarked for saving for a downpayment again. We won’t be investing it because we’re not looking at a super-longterm time (or, at least, we’re not sure if we are, so that’s reason enough not to put it an investment fund). We may look for a 1% interest rate savings account online, though. Any suggestions there, either?

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House Hunting and Shifting Priorities

Just a quick post today, because I’m feeling a bit overwhelmed with different things going on….

Selling a house, finding a new place to rent, and moving are pretty big deals, but I’ve been preoccupied with a few other things. Things like:

  • If we have room in our budget (as I think we may) when we get settled and are both getting our regular paychecks, how should we allocate that money?
  • What kind of benefits should I sign up for at my new job?
  • Should I open up a Capital360 checking account? A savings account with them?
  • What should our savings/debt eradication goals be?

From what I can see, we’ll have MAYBE $600 wiggle room in our budget, though I’m hoping for more, considering that our rent should be lower than our current mortgage payment. I know the fastest way to save money each month is to have a low rent. Finding a place in the town that we’re moving to is proving to be just as hard as it was years ago when we lived there. Last time we lived there, we moved three times in the course of about 3 years! Not fun, but we finally ended up in a place that didn’t have bugs or was about to be foreclosed. Then we bought a house an hour away. 🙂

What to do with that $600? It’s a hefty chunk of change, but when we’re looking at our goals, it doesn’t seem like we’ll get anywhere very fast. Our goals are:

  • Save an emergency fund (we’d like $2,000, but I’d settle for $1,000)
  • Save for our travel to France next year for H’s conference ($5,000, to be on the safe side)
  • Save for retirement (my IRA is pitiful, by PF blogger standards)
  • Pay down student loan debt (we have over $60,000 of that, so……)
  • Save for a 20% downpayment on a house (if we wanted a fancy house at $240,000, we need $48,000!)
  • Save for L’s college fund (but that’s pretty low on the priority list, which makes me sad)

Now, we don’t have to have 20% for a downpayment. It is just what we’d really like to have.

So, I know there are tons of articles and blog posts about this, but I’m not sure whether to prioritize Saving or Debt Eradication or to split the $600 to do both. Of course, by splitting it, nothing gets done quickly. I do like to have goals that are within reach.

We do have one debt that will be paid off in June of next year (the Citibank card balance that is made up of the transfer from H’s private student loan), and that $450 would be snowballed into that $600, and then we’d have more to work with. But June 2015 is soooo far away.

It’s discouraging to see that we’re not going to meet any of our goals quickly, but I knew that the money wasn’t the reason I took this job.

My mind has been working overtime on all of the changes going on, but I have caught myself thinking, “Hmm, what side hustle could I pick up so that I can speed up our financial freedom?” One of the things I had told myself (and my family!) is that when we get settled in a new place, I will be able to spend more time with my daughter and husband and focus on things other than work. Things like cooking healthy meals, maybe investing in a hobby (I have that sweet camera H got me as a Christmas/Birthday/Graduation gift in December)…. not being tethered to a computer in the evenings once I get off from my regular job.

I’m really struggling to get my priorities figured out. Anyone have advice about this? I know it’s personal, but what would you do?

– M.

Under Contract?

We appear to be under contract on our house! The buyers are the first people who saw our place and while we’re not entirely convinced that the deal is a sure thing, we’ve negotiated and signed a contract. We’re very hopeful that everything will go through, and they have until August 31 to pull out of the deal without losing their due diligence money. 

This means we can go looking at rentals! 

I seriously have no idea how to navigate this with a potential landlord….

“Well, we’re under contract, they have until August 31 to pull out of the deal… is it okay if we wait until September 1st while we’re moving our stuff in to sign a lease?”

Ugh. 

In other news, though, my new job said that they are willing to give me a MacBook for my work computer! I was originally scheduled for a Windows-based laptop, and I emailed IT and asked if there was any way it could be changed to a MacBook. They said that it probably wouldn’t work, because they already had the Windows laptop there and were getting it ready to go. However, I got another email today saying that my request was approved! Until the MacBook comes in, I’ll be using the Windows one, but that is OKAY. You know why?! Because our current MacBook Pro (our only home computer) is giving us these battery warnings and isn’t doing so hot on running more than a couple of programs at a time. This means we won’t have to replace the battery or buy a new machine ourselves!!! SO EXCITED!!! So, let’s just say we went crazy when we bought a new computer…. It could have cost us $1200! LOOK HOW MUCH WE’RE SAVING. Sweet deal.

What is new in your lives, PF’ers? Anyone else reaping the benefits of a new job right now?