Now that we’ve paid off nearly all of our non-mortgage debt (only $1000 to go; it will be gone by mid August), I’m thinking more about what we want to accomplish financially this year. For the last few years, it’s been all about debt repayment, and savings has taken a backseat to getting out of the hole. But there are 5 main places where we save money. I have a 457 plan at the library, my husband and I each have an IRA, we have an HSA and we have our ING account. Since we’ll have the last four months of the year with no debt payments at all other than the mortgage, we’ll be able to use the money we used to pay towards debt and put it in savings instead. Our goal is to max out our IRAs ($4000 each for the year), max out our HSA ($5650), and continue to put $100/month into ING and 30% of my library pay into the 457. Right now, we’re way behind schedule on the IRAs and HSAs, because we’ve been pretty focused on debt payments so far this year. Here’s where it stands so far:
- my IRA: $800
- his IRA: $1400
- our HSA: $1400
- my 457: $2500
- ING for this year: $600
So we’re on track with the 457 and ING. But we need to boost our IRAs and HSA. I think I’m going to follow NCN’s method of focusing on one account at a time. It just feels like that will make the whole process more satisfying. The $800 in my IRA for this year is in a traditional IRA. I have not funded my Roth at all this year (I put in $500 in March, but I counted it towards 2006). So I plan to put $3200 into my Roth by the end of the year. We still have my husband’s traditional IRA on a $200/month autodeposit, which we’ll keep doing for the rest of the year, so we only need to put $1600 into his Roth (which we haven’t opened yet) in order to max him out for the year. I think we’ll tackle this one first, since it’s the smallest amount and will give us a sense of immediate gratification. The HSA is a big one – we still need to put in $4250. That will be a challenge, but we might as well aim high. We know that we’re going to be needing some of the HSA money soon to pay for my husband’s lipoma surgery that he just had, but we’d like to end the year with enough money in our HSA to cover our deductible just in case.
So there it is. We know that reaching all of these goals is going to be a stretch, but it will feel so good to have to put money into our own accounts instead of paying back our debts every month. I’ll keep you posted on how it’s going.