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Home > 39 Minus Two Weeks - My Financial Planning

39 Minus Two Weeks - My Financial Planning

November 30th, 2014 at 07:39 pm

So in about two weeks here I will be 39. That means that in 1 year and 2 weeks I'll be 40. It's really, really hard for me to see myself as a 40 year old ...

I've been thinking a lot about what I can do to get myself better set for life in ten - fifteen years - the time I'd really like to be at least Financially Independent if not able to kiss the 40 hour work week goodbye.

One thing I'm realizing will play heavily into my financial well being in the future is my health. If I continue the way I am now, my medical bills will more than likely prohibit my FI or early retirement. Plus it would more than likely make life not all that enjoyable.

Financial health and body health I think go hand in hand in the long run.

So thinking long and hard, I've come up with some long term savings goals. These are things that I hope will help me along the road to eventual Financial Independence.

I currently have a networth of approximately $200k. About 35% of that is in two taxable accounts, and the remainder is in ROTH, 403(b), IRA, etc. Included in that is also about $5100 in an EF that is pretty hard to access (earning .90% APR) I have no debt.

Starting in February I'll be able to contribute to my workplace retirement account. Once I see those numbers I'll have to figure out how much I'll continue sending to my ROTH, and how much I'll contribute to the 401k above the required amount.

So I'm going to borrow a term from CyNewbie of YNAB - Big Bodacious Goals for my 39th year of life:

1. Save $2,500 in Car Replacement/Repairs category
2. Save $3,000 in Taxable Account category
3. Save $3,000 in House Downpayment category
4. Save $500 to replace computer

I'll be adding the above goals to my sidebar soon.

Any Windfalls or Snowflakes will be handled like this:
1. Amazon gift cards - pays for protein powder for smoothies, or any ebooks I want, etc.

2. Non-gift cards: (i.e. cash, PayPal funds, tax refunds, 3rd paychecks, overtime)Leftover money from Utilities(gas, electric, phone), Fuel, Grocery categories. *Birthday/Christmas cash I might treat a little differently - maybe a 50/25/25 split.

***20% to Spending Money
***40% to Taxable Account
***40% to House Downpayment

Below is my budget. Pre-tax I have health insurance, health account (Fafa??) and dental insurance taken out right now.

So .. after those deductions, my net income is about $1647/month (until January 30, then I'll be getting a raise of 4-5%)

Tithe: 145
Giving: 25
Rent: 430
Internet: 66 (ugh!! wish I could get this lower)
Phone: 40
Electric: 50
Apt Gas: 40
Groceries: 150
Spending Money: 20
Medical: 25 (have 50/mo deducted pre-tax)
Kari (Cat): 40 (food, litter, vet)
Car Gas: 50

Savings/Rainy Day:
EF: 25
Car Ins: 45 (pay 2x a year)
Life Ins: 16 (pay 1x a year)
Car Replace/Repair/etc: 150
Vacation: 50
ROTH: 200
Computer/Electronics: 40
Taxable Investments: 25
House Downpayment: 25

Clothing, Restaurants/eating out, Household stuff, Entertainment, misc. all come from the Spending Money category.

I don't have cable, and I am not currently paying for any subscription services. I have been using Bing to get free Hulu+, but am seriously considering stopping that. I just don't use it that much.

As part of my effort to improve both my physical health and my financial health, I am going to start doing this --- Any food "treats" (i.e junkfood) won't come out of the grocery category, but will come out of the spending money category. Since I would like to be able to use this for other things than food, I'm hoping it will help me to curb my impulse to purchase (and consume) this stuff.

10 Responses to “39 Minus Two Weeks - My Financial Planning”

  1. NJDebbie Says:
    1417377101

    I can honestly say that I am enjoying my 40s more than any other age myself. I am much more confident, secure and more independent than ever. Embrace your 40s!

  2. scottish girl Says:
    1417377113

    Good goals Smile

  3. PatientSaver Says:
    1417381809

    When I was younger, i had more money in taxable accounts, but when time went on, the ratio of taxable to retirement monies flipped. Today, I have all but a relatively small portion of my assets in retirement accounts. I'm not sure why i'm telling you this but it was an interesting trend I hadn't anticipated. It's a good one, tax-wise.

  4. FrugalTexan75 Says:
    1417386234

    Thanks NJDebbie and Scottish Girl Smile
    PS - The retirement accounts make sense tax wise, but since I'm wanting to retire by 55 at the latest, I need to make sure I have at least 5 years worth of non-retirement account savings. So .. roughly $125k (minimum). If I qualify for tax savers credit again this year, I'll probably transfer some of my taxable account money into my ROTH - just enough to max out the tax savers credit. I more than likely won't qualify for it again, so want to take advantage while I can. Smile
    I really doubt I'll be in a higher tax bracket in retirement, so I am considering switching from funding a ROTH to funding a Traditional. That way I can get some of the tax advantages now rather than later when I can't take advantage of the tax savers credit. This is still something I'm pondering on.

  5. LittleMissSplendid Says:
    1417386583

    I think you mean that in 1 year and 2 weeks you'll be Fabulous =)

    I like your mention of using Amazon giftcards as windfalls/snowflakes. I get giftcards occasionally and hadn't thought of them that way. I'll have to consider that as I continue to create my own financial plan.

  6. Petunia 100 Says:
    1417388231

    Your Roth contributions are always available to you. Consider withdrawing money from taxable and using it to max your Roth. Send your new money to your 401k.

    My 40s have been my best decade yet. Smile

  7. FrugalTexan75 Says:
    1417389306

    Little Miss - You're right. 40 and Fabulous Big Grin


    Petunia - The taxable money I'm considering moving into my Traditional IRA is all in stocks. I have both of these accounts (traditional IRA brokerage and regular brokerage) at the same institution - so it would only involve moving stocks from one account to another. To put the money in my ROTH, it would involve moving from one company to another company. Plus that ROTH isn't a brokerage account - it's a 2025 Retirement account (can't think what that's called right now.)

  8. ceejay74 Says:
    1417407168

    My 40s are kind of rocking it for me so far (I turned 40 in March). There are sobering parts -- feel like I'm facing mortality more than I used to -- but my determination, fearlessness and confidence, and just my general attitude -- are off the charts.

  9. PatientSaver Says:
    1417436484

    If you do some quick research, you'll see there's some very sage advice out there on using both Roth and traditional IRas as retirement income for maximum tax adavantage.

    http://www.mymoneyblog.com/pay-zero-income-taxes-in-retirement.html

  10. FrugalTexan75 Says:
    1417483551

    That's awesome Ceejay Big Grin

    PS - Thanks for the article. Very interesting. I read another article today where it said the tax savers credit was good up to 30,000 (for an individual) so I actually have a long way to go before maxing out on that. (although I think it is a graduated tax credit)

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