I Paid Ourselves First this year.
With every passing month and, later in the year, with every paycheck, I Paid Ourselves before paying our mountain of bills.
Our mountain amounts to eight or so grand per month, and some months more. Our biggest monthly expense is our son's college, as it has been now for the two-and-a-half years that he has been attending a private liberal arts school in the Chicago area. This year, and the next one for that matter, I shelled out thirty large. How I saved up enough to pay for four years of that, and then another four years of comparable expenses for our high school aged daughter, is another story.
If I have one mantra when it comes to that form of exchange that we call money, it is to Pay Yourself First. I wish that I had adopted that motto twenty, fifteen or ten years ago but, as they say, better late than never.
All in, I Paid Ourselves $16,900 in 2018.
Five grand went to our daughter and in the most simple way possible. Years ago, I automatically set up monthly contributions to both our son's and our daughter's Illinois Bright Start 529 accounts. I started them at $300 per month each, then increased it for a year or so to $400 per month, and then automatically contributed $500 to each account on the first of every month for about four or five years.
I had to reduce that amount back to $400 per month each when our son got braces ($200 per month for several years after a grand down) and then our daughter. For over a year, we made monthly payments on orthodontia for both of them.
Thus, the amount remained that $400 per month that I still continue paying automatically. Since I am a numbers guy and tend to like nice round numbers, I send an extra $200 to this account once per year to make it an even five grand.
As of today, even despite the massive losses that we have taken on all of our accounts as the stock market has dropped quite a bit, I have over a hundred grand combined in her college accounts.
With our son, we are now in paying mode more so than saving mode on his behalf.
Regarding my wife and I, I paid myself $6,900 first in 2018 and paid my wife $5,000 first. Considering that she works extremely part-time, making a bit more than seven thousand all year, five grand to her retirement account is not so bad.
I am not patting myself on the back. While I think the amount that I Paid Ourselves First is pretty good considering that it amounts to about fourteen percent of our household income, I would like it to be more of course.
$16,900 is $1,350 short of the $50 per day that I would like to report investing on my family's behalf and just a mere $100 less than I intend to invest on our behalf next year at the minimum.
By the IRS recently changing the amounts to a nice, round $6,000 per year for IRA contributions, it makes the equation very easy for a married mensch like me. I will simply send $500 per month to both my own and my wife's IRA in 2019, for an even six grand contributed to each, or $12,000 total.
When it comes to our lovely daughter's college accounts, I am soon to become a little greedier. As many, if not most, financial experts agree, it is better to fund your own retirement than your children's college accounts.
Considering that at a fairly modest income, I was able to sock away a hundred grand for each of our two children while supporting my family in a pretty decent lifestyle, I feel that I have saved enough for her.
Based on her high achievement and the Big Ten universities that she has her eyes on including Northwestern and University of Illinois, we will most likely be paying more than thirty grand per year for her.
I know, that's a lot of dough for a middle class family to bear. It has caused student loan debt to skyrocket into the stratosphere at over $1.5 trillion.
It is not that we will not expend any funds above and beyond what we have saved for her. It is just that I am going to shift the $400 per month from her 529 account to my new "Payment on Death" fund, a/k/a my T. Rowe Price Dividend Growth fund.
Yes, it feels like the financial sky is falling as I watch my family's investments lose value more days than not over the past several weeks.
Yes, I have bought into this bloodbath and more than once and will likely do so again.
Part of becoming a successful investor and saver is to continue doing so through thick and thin, with paycheck after paycheck if you are a worker bee like I am, and then to invest any supplemental income that you generate or come into over a sustained period of time.
Dear Reader, we cannot stop investing now just because the President is stirring things up with Tweets and comments about China. There will be future times with other Presidents who may just placate China and may not Tweet at all.
Regardless, as I get ready to travel to Arizona via Las Vegas in a few days (which seems like it will run four grand that we should not spend), I am done Paying Ourselves First for this year, but will continue doing so for many years to come.
With every passing month and, later in the year, with every paycheck, I Paid Ourselves before paying our mountain of bills.
Our mountain amounts to eight or so grand per month, and some months more. Our biggest monthly expense is our son's college, as it has been now for the two-and-a-half years that he has been attending a private liberal arts school in the Chicago area. This year, and the next one for that matter, I shelled out thirty large. How I saved up enough to pay for four years of that, and then another four years of comparable expenses for our high school aged daughter, is another story.
If I have one mantra when it comes to that form of exchange that we call money, it is to Pay Yourself First. I wish that I had adopted that motto twenty, fifteen or ten years ago but, as they say, better late than never.
All in, I Paid Ourselves $16,900 in 2018.
Five grand went to our daughter and in the most simple way possible. Years ago, I automatically set up monthly contributions to both our son's and our daughter's Illinois Bright Start 529 accounts. I started them at $300 per month each, then increased it for a year or so to $400 per month, and then automatically contributed $500 to each account on the first of every month for about four or five years.
I had to reduce that amount back to $400 per month each when our son got braces ($200 per month for several years after a grand down) and then our daughter. For over a year, we made monthly payments on orthodontia for both of them.
Thus, the amount remained that $400 per month that I still continue paying automatically. Since I am a numbers guy and tend to like nice round numbers, I send an extra $200 to this account once per year to make it an even five grand.
As of today, even despite the massive losses that we have taken on all of our accounts as the stock market has dropped quite a bit, I have over a hundred grand combined in her college accounts.
With our son, we are now in paying mode more so than saving mode on his behalf.
Regarding my wife and I, I paid myself $6,900 first in 2018 and paid my wife $5,000 first. Considering that she works extremely part-time, making a bit more than seven thousand all year, five grand to her retirement account is not so bad.
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| Dates and amounts sent to my wife's and my Roth IRA accounts |
$16,900 is $1,350 short of the $50 per day that I would like to report investing on my family's behalf and just a mere $100 less than I intend to invest on our behalf next year at the minimum.
By the IRS recently changing the amounts to a nice, round $6,000 per year for IRA contributions, it makes the equation very easy for a married mensch like me. I will simply send $500 per month to both my own and my wife's IRA in 2019, for an even six grand contributed to each, or $12,000 total.
When it comes to our lovely daughter's college accounts, I am soon to become a little greedier. As many, if not most, financial experts agree, it is better to fund your own retirement than your children's college accounts.
Considering that at a fairly modest income, I was able to sock away a hundred grand for each of our two children while supporting my family in a pretty decent lifestyle, I feel that I have saved enough for her.
Based on her high achievement and the Big Ten universities that she has her eyes on including Northwestern and University of Illinois, we will most likely be paying more than thirty grand per year for her.
I know, that's a lot of dough for a middle class family to bear. It has caused student loan debt to skyrocket into the stratosphere at over $1.5 trillion.
It is not that we will not expend any funds above and beyond what we have saved for her. It is just that I am going to shift the $400 per month from her 529 account to my new "Payment on Death" fund, a/k/a my T. Rowe Price Dividend Growth fund.
Yes, it feels like the financial sky is falling as I watch my family's investments lose value more days than not over the past several weeks.
Yes, I have bought into this bloodbath and more than once and will likely do so again.
Part of becoming a successful investor and saver is to continue doing so through thick and thin, with paycheck after paycheck if you are a worker bee like I am, and then to invest any supplemental income that you generate or come into over a sustained period of time.
Dear Reader, we cannot stop investing now just because the President is stirring things up with Tweets and comments about China. There will be future times with other Presidents who may just placate China and may not Tweet at all.
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