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I sure could go for a windfall right now…

August 27, 2008

You know those “how to handle a windfall” posts you sometimes see? I would never have the question! I have a million options of what to do with a windfall, and I sure go for one right now. Instead, I’ve create my own by slashing my Roth IRA contribution for September to $0. An instant $308 windfall for the month of September! (Yes, I know this isn’t really a windfall. Leave me alone, it is the best I can do!)

I looked at how much I have contributed so far this year ($4055), and realized that I’d only have to put about $315 in Oct.-Dec. to reach the max (and my goal). My budget states $308 already. I can manage that! I put some extra money in one month this summer when I was feeling flush (May?) with the idea that I’d be thankful in December. Turns out, I’m thankful much sooner.

The magic of compound interest? Of course, the market could turn around any day, but I am feeling less secure about my savings stash than my retirement stash, so the e-fund contributions will stay and the Roth will be put on hold. I wish I knew more about the security of my job, but I’m young, bright, and talented (if I don’t say so myself). If I was let go, I could find something else. Right? (By the way, I do not find compound interest magical. It is powerful, but magic??? Come on, it is just math!) Besides, my E-fund has compound interest as well, with equal amounts of magic (none).

That $308 will be diverted to the travel fund, which still may be slightly below zero until November, if I buy my plane ticket. Travel spending should decline heavily after that, and be built up to a respectable level, even if I do buy some hiking gear. No vacations/trips are planned until roughly next spring (except Christmas and minor camping trips).

By the way, the next extra paycheck month is October, not December.  I have no idea where I got that idea, but that makes me happy.  I’ll easily be able to replenish some of my short term savings accounts that month.  I also emailed my bank, and my student loan might be differed as soon as October 1st, but no later than November 1st.  That is $141 that can be allocated elsewhere, though I (sort of) plan to allocate $75 to go in my dedicated student loan payoff account so my payments don’t rise when I complete school.

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3 Comments leave one →
  1. August 28, 2008 9:04 am

    (By the way, I do not find compound interest magical. It is powerful, but magic??? Come on, it is just math!)
    This made me laugh, and I’m not sure why.

    I like your reasoning on funding savings and not retirement. Usually I do stuff without thinking it through and then look back and think, “Why did I do that?”

  2. August 29, 2008 5:49 am

    I really wish I had been more financially savvy when my husband received his $10k inheritance last year. Unfortunately, we only have a few things to show for the money… And none of it left. Some good came out of it, though: My fall textbooks that year, we used $5.5k to pay cash for my Miata, we bought new rims and tires for his car and we’re the proud owners of a 120 gallon fish tank. The rest? I have no idea where it went… Windfalls are really great, as long as you handle them properly! We sure didn’t, and I think we both sometimes regret it.

  3. September 1, 2008 7:16 am

    Ahh, those posts baffle me. Must be nice to have family with money. I inherited a 1989 Toyota Camry with 80K miles that got me through grad school. That’s the biggest windfall I ever got.

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