Since my side income seems to be growing more than I expected this year, I’ve decided to increase my 401(k) contributions to reduce taxable income. In February, I increased my income deferral rate from 4% — the minimum contribution necessary to maximize the company’s match rate — to 6%. I was already maxing out my $4,000 yearly contribution to my Roth IRA, so adding more to the 401(k) made sense. At some point, I increased the rate again to 8%.

Today, I doubled my contribution rate to 16%. I will try to keep it at this rate for the rest of the year.

$55 of my savings each paycheck goes to a savings account at ING Direct earmarked for “relocation.” This will hopefully provide me with enough cash for a down payment on a house at some point, but it’s only at $1,755 right now.

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Flexo, the owner and creator of Consumerism Commentary, has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow him on Twitter.

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