I added $250 to my Roth IRA during the month of September which leaves me just $200 shy of hitting the maximum allowed for a year which is $5,000. It will be nice to be able to spread that remaining $200 out over the next three months and I’m absolutely positive that I will be able to accomplish this goal. I will probably just put $200 in during October and then not have to worry about it at all during December when I’ll have other money issues to focus on such as holiday shopping.
There is still a tiny part of me that thinks I might be crazy for pumping my cash into the IRA which is down 21% from when I started it last year, but I have to just keep telling myself that hopefully I’m buying on sale, the market will recover and that I’m not going to need this money for a very long time.
Anyways, I’m still pretty excited to be so near the finish line for the one and only goal I have highlighted in the sidebar (which is now updated). Next year (or sooner) I will add a few more financial goals to be tracked on this blog.
After I ran my July numbers, I found some extra money lying around and used it to add $500 to my Roth IRA which brings my total contributions for the year to $4,300! I’ve updated the graph in my sidebar to reflect the changes. Now, I only have $700 to go before I hit the $5,000 limit. Once it is fully funded, I will either increase contributions to my emergency fund, to the Vanguard Investing fund or perhaps pay a little extra to my student loan.
My roommate, T, left for Sweden last night. I could have been sitting next to him on the plane, but instead I’m sitting here at my desk.
It was about six months ago, when he first asked me if I wanted to go with him. My first instinct was to say no because we all know trips to Europe aren’t cheap. T probably knew that my inclination was to say no, so he sweetened the deal by informing me that his cousin was living there and would be happy to provide a place to stay. It would still be expensive, but that was one major expense out of the way. Another swaying factor was that T didn’t have anyone else to go with.
It’s not like he gave me puppy-dog eyes, but I had heard that he didn’t have anyone else to go with. Here’s some background: T is Swedish, he took Swedish in college and he’s sort of all-around enamored with the place. (I don’t think he’d mind if he found a girl there, either). Anyway, I felt slightly obligated to participate in the trip because it seemed as if it might not happen if I didn’t. I’m not inclined to let my friends (or even my feelings) push me into spending a couple thousand dollars on a European vacation, but that wasn’t the only factor. I do like to travel, I do love Europe, I am part Swedish…all of these played a part in me saying: Yes, I’ll go with you. Because we have free lodging. Because I miss Europe. Because you have no one else to go with. I will create a travel fund and begin saving now.
One month after this talk, he asked if it would be OK if his sister came along; something had happened that she could now go (he had asked her before). I don’t know his sister very well, but I’m sure she’s very nice and we would have no trouble getting along. However, this instantly took away those feelings that I had to go with him so he wouldn’t be alone and it also made me feel as if I would be the third-wheel. I began to ride the fence and declared myself a maybe.
T is a free-spender as is his sister (granted, she can afford to be). I began to think that a trip planned by the three of us might start to be more expensive than I was willing to participate in. Even though we had free lodging (it turns out it was only for a couple of days), the plans for the rest of the trip were to stay in pretty nice hotels and eat at pretty nice restaurants. The overall trip wasn’t an expense I could justify at this point in my life. So I decided that I was out and he would go with his sister.
But cost wasn’t the only deciding factor. I’m not dying to go to Sweden. I’m sure it’s a lovely country and I will get to Scandinavia someday to explore my roots, but right now, it’s not at the top of my list. Thinking of where I would like to go has got me thinking of priorities and I’ve come to the conclusion that I have somewhat of a delayed travel plan.
Which leads to some deeper thoughts; please bare with me here. Sometimes I like to think that I’m holding off on my world travels until I find someone that I really want to travel with, i.e. my future wife. I know that traveling with friends or on my own is fun; I’ve done it plenty and will again. But I can’t help thinking that it would be a better (and what do I mean by better? I’m not sure) experience if I was traveling to a place I truly wanted to visit (not just cause my friends were going there) with someone I truly love (not that I don’t love my friends) and if I wasn’t that worried about the money.
Wouldn’t I rather save now and be able to take a really great trip someday rather than scrimping while on vacation because I didn’t have the money to do the trip justice in the first place? I remember the last time I was in Europe when I was a poor college student and I wasted the smallest amounts of my limited time in Europe by looking for the cheapest postcards I could find. How dare I spend 50 cents on a postcard when there might be one for 35 cents around the corner? What was I doing spending my time shopping for a postcard of a cathedral anyway, when the cathedral was just up the street? If I had it to do over again, I’d do that part differently.
All that to say, as savers, aren’t we a bit of risk-takers? Are we denying some instant gratification now to hopefully be gratified in the future? That’s the point, I suppose. But we’re not guaranteed that future - does that bother anyone else? It’s a risk, but a calculated one, I guess. Yes, the odds are with us that we will survive to retirement or whenever and then we will have the last laugh. They say youth is wasted on the young; are they right? Will I have the vitality to travel the world when I’m retired? How hard is it to even think about retirement when you’re in your twenties? Do you ever feel weird because you just got into the workforce and you’re already considering your exit plan while your friends are out spending their paychecks like there’s no tomorrow?
And further: if we’re savers now, won’t we always be? How will we know when we’ve saved enough? When will we start our spending? For me personally, I have no idea. That bothers me. I don’t like not knowing.
Does anyone else think about this stuff???
When another friend heard that I had backed out on Sweden, she asked T if she could go. I know basically how much she makes and how much she complains about not having any money so I was surprised that she could just up and consider a trip across the world. T basically asked her straight up how she could afford to go and this is what she said:
My philosophy is to take these chances when they come. When I get older, I’ll have a family and won’t have the opportunity or the money to take trips like this. I don’t have the money right now either, but I’ll worry about that later.
That’s pretty much exactly the opposite of my plan. I’m trying to save and invest as much as I can now and put my money to work so I can retire and have both the money and opportunity to travel wherever and whenever I want. All I have to do is make it to retirement…and hopefully, an early retirement at that. If you’re reading this, there’s a good chance you know about compound interest and the idea that the earlier you save the better off you are. Do we take our financial knowledge for granted? Do you think this is an overall concept that people my age (20s) just don’t have a clue about? I think that might be the case with my friend. Or maybe she’s just completely different than me. Different strokes for different folks, right? I guess it all comes down to priorities.
Wow, this post is all over the place. All apologies. I’ve just been thinking about a lot today as T touches down in Sweden and I deposit money in my retirement account.
On a complete aside: I really, really like this song. A lot.
But I’m bummed their little snippet doesn’t have any words!
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