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Roth IRA and spending plan

January 20th, 2006 at 03:55 am

Payday is tomorrow, and I'm looking forward to making another student loan payment Smile I am over budget this pay period, but only by $8.76 so that's not too bad.

Here's how the last two weeks went:

Must Haves (goal 50% or 402.36)
~ Actual: 45.7% or 367.50

Save (goal 30% or 241.42)
~ Actual: 24.6% or 197.94

Wants (goal 20% or 160.94)
~ Actual: 30.8% or 248.04 Frown

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Here's the plan for the next two weeks:

~262.50 half of Feb. rent
~160.54 extra student loan payment (extra 0.54 from paypal confirmation of my account)
~57.63 regular student loan payment
~66.47 to retirement savings (I opened a Roth IRA!!)
~232.93 spending budget

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Also, since I opened an IRA with T Rowe Price, I'll be moving around my short-term (aka "freedom fund") and long-term savings in order to make the first contribution . . .

~34.53 use of short-term savings
~899.00 use of long-term savings

This will leave me with just $31 in my long-term savings (aka the emergency fund). I'm not sure how I feel about this yet. My first goal had been setting up $1000 in an emergency fund and then paying off debt. Now my emergency fund has morphed into a retirement fund. I feel like I should build it back up, but I don't want to stop debt payments. The reason I opened an IRA now is to take advantage of the savers credit (which I won't qualify for next year). I get 10% of my IRA contribution back as a tax credit, which I plan to use for debt payment. I think for now I'll see about slowly adding to my emergency fund, and just continue with my planned debt payments.

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