Listen.
Can you hear it? It’s the sound of money disappearing from my savings. It’s been going on for many months now. I haven’t been able to save as much as I used to, and I’ve had to dip into my savings more often than I have wanted.
I think the reason for this is twofold. First, I’ve probably been a little too aggressive with my investing strategy based on my income. Considering my fixed expenses, like rent, I probably can’t afford to send 12% of my gross income to my 401(k), plus $250 a month ($333 a month in 2005) to my Roth IRA, plus $800 a month or so into general long-term savings. I’m going to have to rethink that strategy.
The second fold of the aforementioned twofold reason is budgeting. I’m spending too much in general, and I’m going to cut back on some of my expenses. The car has been the largest change in the past year, and I don’t have much choice there. My rent is sky high and in May I might have to consider (gasp) finding a roommate.
I wonder if the market would be right in a few months to buy a duplex and rent out one side while living in the other. Unfortunately, that would require a lot of money up front that I just do not have.
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10:27 am (reply)
I put only 6% to 401K since the company will not add the 50% match to anything over 6%. The rest goes into the ROTH IRA. If I had more than the max ROTH IRA per year, I would open a traditional IRA account and put the money in that. Even though it is minimal, I don’t like the employer control over the 401k, but I’ll take it for 50% more money.