Signing up for my 401K

I am finally eligible for the 401K at my new job. I worried about it for weeks before finally deciding that I can afford to put 10% in the account every pay period.

Last pay period was the first time it came out. I was relieved to find that I must have ran the numbers correctly because I can live on whats left after taxes, insurance and 401K come out. One thing that is disheartening is that there really isn't anything left over after that. Well, not nothing, but about $200 a month. 

So that amount will go into my savings. I know I need to pay off my credit card, and I am paying a little extra each month, but I'm afraid if I don't put the extra money in savings I'll wind up running up the credit card again for little things..

And there are always little things. This month for example, it's time to renew my plates. In Utah you have to pay property tax on your vehicle every year when you renew your registration so between that and the cost of the emission text, that will eat up the $200 extra this month. 

It's discouraging because it's hard to see how I can get ready for retirement when I'm money is so tight, but I do know that once I start getting commission I will have more flexibility.

In the past, I would not have put money in my 401K  until I "had" money. That day would have never come. So I'm glad that I went ahead and started with 10%, which isn't a lot, but it's a start. My company matches 50% up to 4%, which is crazy math but basically they are adding about $60 a month to my retirement account. It's not a lot but every year it will add $720 to my retirement that I didn't have to earn.

It's a start. Now I just need to figure out how to look at my 401K account and see how things are doing. That's a job for another day!

A little too optimistic

So, my last post I was overly optimistic. It doesn't look like this virus is going away anytime soon, and as usual, life is constantly changing.

The last few months have been so confining, as in, we are not leaving the house, not seeing friends, all of the stuff everyone else is doing. However, it has also been a time of expanding change.

I was living with my daughter, son in law and the grandkids. It was wonderful. I was able to pay off one of my credit cards, build a little bit of an emergency fund and start on my way to FI.

Then the reality of three adults, working from home, with two elementary aged kids home all the time, made the house seem very small. We were talking about how to make it work if this was still the reality in the fall, and my daughter found out she was pregnant. Very quickly we realized that they needed the space I was occupying for their expanding family.

So I found an apartment and within two weeks was moved. This caused me to dip into my emergency fund a bit because I had downsized so much. Not only was I living in a smaller space, but I was planning to move across the country.

Now I had to replace all the things I had sold in preparation for the big move. It was a little stressful. For the first time in my life, I didn't want to spend any money!

I'm in the new apartment and it has come together very well. My expenses, of course, have gone up a lot, so I'm working on a new budget and trying to figure out how to still pay off my remaining debt, build a retirement fund, and rebuild my emergency savings.

It's stressful, but I feel like I have a better foundation since finding the Choose FI podcast. We'll see how the budget goes!

I paid off my Kohl's card

I did it! I paid off my Kohl's card! It was super stressful. It's so easy to justify that monthly payment. It's easy, doesn't require much effort and really, it's not a lot of money. It would have been very easy to continue making that payment forever. It was much harder to give them $1700 all at once.

Also, department store credit cards are the absolute worst. The interest rate on that was so high that most of my payment just went to interest. I used a repayment calculator to determine my payoff. If I would have made minimum payments it would have take 36 months and I would have paid $855 in interest. If I paid $100 a month, which is what I've been doing, it would have taken 22 months and I would have paid $461 in interest.

I paced the house for about an hour before I was able to push the button to pay off that debt. All the worst case scenarios ran through my head. What if I lost my job? What if I got sick- I just started a new job so I won't have health insurance for two months. What if my car breaks down? A million what if's went through my head.

Ultimately, I knew I needed to get rid of this debt. Eventually I would like to buy a small house in an area with a lower cost of living. In order to do that, I need to improve my credit score. Going from 77% credit utilization ( amount of debt in relation to total credit limit) to 66%, is not a huge leap, but it's a start. Hopefully I'll see a few point increase on my credit score.

Also, every $100 I can remove from my monthly living expenses reduces what I need to have saved for retirement. It's a small win, but at the same time, it's a huge win!

I've never paid off a credit card before. That lovely American dream said Charge It! And I did, over and over again. I'm excited to finally be taking steps towards a debt free life.