What Will You Do With An Extra $330 Per Year?

Photo from Amazon.com

I thought of the question "What Will I Do With An Extra $330 Per Year" when a co-worker came into my office a couple days ago and told me "Thank You" for informing me how to save money on my phone bill. It will help tremendously with he and his wife's budget. I was so humbled.

You see the previous day I informed him about Magic Jack. I was very touched because I was only passing along the information my relatives in Dallas informed me of.  Pay only $20 or $30 (if you keep your existing land line phone number) per YEAR for your phone bill. Not per month, but PER YEAR!! I told my co-worker how I ordered the equipment. It will arrive today or tomorrow.

With the average land line being $30 per month it equals to $360; pay $30 (Magic Jack Plus) once a year; and you SAVE $330 per year. I know saving an extra $330 per year may not seem much, but it can be the difference for a single person paying an unexpected health bill, a father wanting to take his family to the beach or the mountains for the weekend, or an educator finally making the decision to open a 403(b) or Roth 403(b) account to supplement their retirement.

Photo from Bestlunchideas.com

For many people $330 may not seem like a lot, but believe me it can make a difference. What other savings can you do to be able to contribute to your retirement. Below are my 5 Suggestions:

1) Brown Bag It: Ever since I started working at age 18 as an undergraduate at Clemson University in their Business Department, I bagged my lunch. A few times I may go to the cafeteria cafe and order a small pizza or hamburger, but 98% of the time I brought my lunch to work. It saves so much money. You only need time. Take the time either the night before or when your breakfast is in the microwave, go grab a fruit and make a sandwich. Mix it up by bringing a salad twice a week and a sandwich the other days.
My Result:
THEN: After I got my graduate assistantship for Grad School, the remainder of my tuition was paid by me stashing my savings(brown bagging it). NOW: I contribute to both a 403(b) and Roth 403(b) via ValuTeachers.

2) Automate: It is not quite a savings, but if it is out of sight it is out of mind. Have your HR automatically take the money out of your paycheck and directly to a savings account at another bank, a 401(k), Roth IRA, or 403(b) account. And when you get a raise increase the amount you contribute.
My Result: In 2008, I was able to contribute fully ($5,000) to my Roth account. You can always decrease as I did when I had to start car payments in 2009. I still contribute, but it is not near the amount I would contribute if I didn't have a car payment.

3) Buy Generic Products: There is very little difference.
My Result: I pay generic on vitamins, cleaning products, store brands of Spaghetti, jam, peanut butter, bread, etc. The savings goes to my retirement account.

4) No Name Brand Clothing: Similar to #3, but for clothing. However, if you must buy name brands shop at The Goodwill or other consignment shops. Shop off season as well. Buy Winter items during the Spring or Summer.
My Result: Recently went to The Goodwill in Brooklyn, NYC and paid for two pair of pants - $9 each - with regular price of $45 per pants. Nice clothing for work in which you paid less in clothing than what you earn in any given day.

5) Travel Savings:

Photo from Airlines.co.in

1. If you like to go on a cruise go during the Winter.
2. Travel after Labor Day, the prices goes down tremendously.
3. Use your air mileages if you travel 2-3 times per year.
4. Travel mid week and purchase airline tickets on a Tuesday or Wednesday.
My Result: I've been able to travel on a cruise in January that was half the cost of a Summer cruise and will be traveling to China for New Years. It may be cold climbing The Great Wall, but the savings goes to my retirement account.

What will you do with an extra $330 per year and what are your other ways of savings to pay for your retirement? Please comment below.

Rhonda W.

Retirement vs Travel, Emergency Fund, & Debt Payment

When I tell people I'm a Retirement Specialist with ValuTeachers, they want to know for themselves how do I fund my own retirement, "I have high credit card debt", "I want to buy a house", "I want to pay for my kids College education", etc.  My thought is why can't you do both: Fund your Retirement and your other obligations/hobbies at the same time.

The Trevi Fountain in Rome, Italy.
Personal photo from Rhonda W.

TRAVEL: I love to travel and give it priority in my life. You learn so much from travel. My twin sister Sharee recently shared our love of travel on the Holstee Manifesto page. Prior to 2009 I didn't have a car payment so I saved what I used to spend on car payments to fund my retirement by maxing out my Roth Account ($5,000). My income in Education was not very high so I supplemented my income with various part time jobs (SAT proctoring, working football games, concert events, family shows, etc). Many people saw me at so many places they wondered when I sleep. I make it a priority to not only fund my retirement, but also Travel. 

EMERGENCY FUND: This is an area I need to improve on. You need to have 6 months to a year worth of monthly expenses in your Emergency fund. I have used my emergency fund to pay for unexpected expenses (car maintenance, health expense, etc). You can still do both: Fund your Retirement and your Emergency Fund.

DEBT PAYMENT: In 2009 I was in a car accident. Thus, I had to make car payments again. I bought a used car. With this new payment I wasn't able to finance my Roth Account to the max or fund my emergency account at the level I felt comfortable with. However, I still made it a priority to pay off my credit card balance each month. If I'm not able to pay off the full balance, I pay at least half of what I placed onto the card that month. I use Reward Cards so I get cash back or can redeem the rewards for Gift cards(great to redeem as a Birthday and Anniversary gifts). I still fund my retirement and pay down my debt.

The point is even if you have a hobby (in my case travel), funding an emergency account, and/or paying your credit cards, you still need to fund your retirement account. The standard amount to save is 15% of your gross pay. I looked at my gross pay the other day, took 15%, and it gave me an amount I should be investing. I looked at the actual figures and I was paying $5 more than I should. I was investing 7% into my State retirement fund, $100 into a 403b(LSW/National Life Group), $100 into a Roth 403b(LSW/National Life Group), and $25 into a Roth IRA with Edward Jones Investment.

You can do this. Go ahead and invest in your retirement. Whether you are in the education profession/non-profit sector or not remember to invest first in your State Retirement and then other supplemental places (Roth IRA, Traditional IRA, 401k, 403b, Roth 403b).

Rhonda W.