I didn’t write about this at the time because I was in the middle of a crazy run of work/travel stuff that ate up the entire middle of this month, but in a quiet moment before an end of the month post, I wanted to talk about a financial move I made a couple of weeks ago.
From a net worth perspective the end of the month is looking good — I’ll save the details for the wrapup post — but things have moved around some. When the markets were tanking, I took $500 out of my emergency fund and $200 out of my travel savings fund and put it into my Roth IRA, along with another $100 I had already earmarked for the IRA. So, instead of being at $1000 (as planned) my emergency fund will end the month at $500, and I won’t have as much available for my spring break trip.
I don’t think this was a really bad move; I didn’t *quite* manage to catch the bottom of the market (it fell for two more days after I made the move) but overall, I’m pleased to have made a contribution to that account, which I hadn’t done in a while (extra income’s kind of dried up around here and I’m mostly working with my paychecks right now) and to hopefully harvest some buy-low gains. I’m also not super concerned about the emergency fund as such; it should be up to $7000 by the end of 2015 easily if I stick to the plan and, you know, don’t have any emergencies.
I guess what worries me is that I’m still not very good at slow and steady. I’ve always been a boom and bust person financially, great at going short sprints in both spending and paying off debt and even saving, but I don’t really like the patient “allocate $50 a month to this account and build it up over time” thing. I’ve been having a really hard time not just paying off my credit card with what was accumulating in the savings funds, for example. All the time I look at and think “I could just be done with that!” But that would really drain my tiny-again savings accounts now.
And I have to be careful, because I need to think about having available cash. One of the things I like about the retirement funds is just that they are locked up — I won’t ever access them until I’m, you know, retired. I’d never take out money from them for any other reason; in the event of long-term unemployment, catastrophic debt, etc, I’d certainly declare bankruptcy before drawing from them. They are untouchable for the next thirty years or so. This makes me really want to put money into them so it’s “safe.”
But I have other goals besides retirement. I might need money for a down payment (on an apartment, if not a house) or to buy a new car or for whatever, you know? I can’t just throw every spare penny to retirement; I need to build up significant cash reserves. (It sucks that interest rates on savings accounts are so low.)
I don’t know what to do about this, exactly, except be more aware of it and try harder to enjoy funneling small amounts of money to different places instead of making big splashy moves.