Twenty five percent to my future

For all that I have boasted about paying off my student debt and being debt free, I still owe my grandmother a hefty amount of money for my lovely little blue car, and I won’t feel fully free until I’ve got that sucker paid off in full. Unfortunately, it’s not like I can just put all the money I used to pay on my student loans toward my car. Since paying them off, I’ve changed jobs and I’m making significantly less for the time being. Until the money starts rolling in again, I’ve had to reconsider how I’ll pay off this debt without feeling completely crunched for cash.

My plan at this point is to pay ten percent of my income toward the car each month. On each payday, I will write a little letter to my grandmother and include a check for ten percent of my paycheck. I tried it out this month, and ten percent did not feel like a burden. It felt manageable, small enough that I wasn’t worried about paying other bills, but large enough that it keeps me from thinking I can waste my money on luxuries like happy hours or takeout pizza.

This ten percent plan got me thinking. Between paying off my student loans and my short period of unemployment, I drained  most of what limited savings I had, and I want to build a comfortable safety net again. So after I wrote my check for ten percent to Grandma, I transferred another ten percent of my paycheck directly into my savings account, where I’m less likely to touch it. So far so good, but I’d still like to do more.

My job automatically enrolls me in a 403(b) savings plan which they will match (to a very small degree) after one year of employment. Initially, I’d been planning to opt out, at least for the time being, since my paycheck is so small already, and I’ve been feeling pretty strained for money. But the thought of all that money not compounding if I opt out has made me rethink my strategy. Sure, I can’t save much each month, not even a hundred bucks, but surely I can save something for my retirement. So I called the person who manages the 403(b) and set up an appointment for Wednesday. I’d like to be able to set aside five percent of my paycheck for retirement, and when the money starts rolling in, I’ll set aside more.

So that brings me to twenty-five percent of my paychecks to debt, savings, and retirement. I feel pretty good about it. Twenty-five percent seems like a lot, and part of me wonders if it can be done. Then I remember that twenty-five percent of my income is still not that much hard cash, and I worry a little bit less. I won’t be paying off my car or retiring to the Bahamas anytime soon, but it’s the principle of the thing more than the money. I want to be taking the right steps toward my future, even if those steps are baby ones. And hey, one day I’ll be making more money, and if I can save this much now on so little, imagine what I’ll be able to do with more.

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