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Challenge Analysis

September 30th, 2007 at 06:48 am

I finally got around to organizing my challenge money by item. Probably should have done this all along. It is interesting.

Interestingly, overtime, freelance work, credit card rewards and interest were the easiest for me AND the biggest dollars. Focus groups comes up pretty close behind, and as of next week it will be closer to the top of the list as well.

Actually, if I think about it none of the stuff on the list took a lot of effort. Maybe overtime, extra work, and writing money. I think the thing is I get so much more bang for my buck with my real job that I am a little burned out on writing. I really like if I am in the mood and I write a good article I can get some money. But I think the times I was making close to $100/month I was getting really burned out too. It is something I want to pursue in the long haul, particularly when I switch to part-time status or near retirement. In the meantime, it has been a bit much.

I also made $112 selling Cookie Lee jewelry (talk about easy money) though it wasn't a challenge item.

As far as cash gifts - anything I put into long-term savings I counted as challenge money. So we had some significant gifts that we didn't exactly save either. Mostly the gifts that were earmarked for specific things.

To date - challenge money is 12% of my income (paycheck). Total extra money this year was about 17%, but we had an extraordinary amount of gifts. Not exactly sustainable I am sure. (Either the 12% of 17%).

I wanted to quantify my progress and kind of look at what streams of income were really worthwhile. As we have met our goals for the year and are back on track I am re-evaluating. I used to never bother selling things, but this year we made $160. It is not a huge amount, but I think I will work on selling more items around the house. For one, it is something dh can do so I don't have to spend a lot of time on it. I have a pile for ebay anyway so I expect that number to go up through the end of the year.

Interest and credit card rewards we have always done, but really took it to a new level this year. I don't expect to do so good next year, as I don't want to open a bunch of new cards for rewards, or do more balance transfers beyond the ones we did already. But will be a significant interest stream through 2008 & at that point we should have almost as much cash anyway, as we do now with the balance transfers. So by the time we pay all those off we will be making some decent interest still. The credit rewards - we stand to receive $500/year with our current rewards card, and that's great.

We are saving so much money in the long run by dropping dh's broker and switching to Vanguard - I don't even know. That will turn into a huge amount of savings over the next few decades.

Well, my goal next year is to come up with $5k challenge money for retirement (dh's IRA basically). Retirement has really been on the back burner this year as I expect a large contribution from my job on 12/31 & as we needed to get our efund cash back up, etc.

But next year my focus will really shift. Retirement, retirement, retirement.

I will mostly focus on working overtime (primarily tax season) as a way to contribute to retirement. I think I would like to focus harder on getting back to a better work/life balance, and strangely, squeezing in more hours at work accomplishes that a lot more easily. I have to work so little to make so much more. Credit card rewards will be a significant contribution to that, and focus groups if we continue to get so many opportunities. The focus groups pay as well as my job on an hourly basis (sometimes better). We are mostly guaranteed a $1k cash gift that can go to his retirement as well.

I think we could pretty much max out both of our IRAs on my income, and all the challenge/extras would be gravy, if not for preschool. That is only 2 more years. I imagine by the time the kids are in public school that I will have enough raises that it will matter little. We may be able to divert the preschool money to the mortgage or something. (Or maybe should save for orthodontia and all that stuff!). As a plus, dh could work at that point without us spending so much money on care. So in the meantime my goals are not quite as lofty as I expect them to be in 2 years. There are other things that are more important to us while the kids are so young. It certainly won't be forever. But we are miles ahead all the same where we were when we first cut our income in half to be home with the kids.

So yeah, next year I won't count things like interest to my challenge. I am going to leave that to my efund. I guess only money outside my regular wage that goes to retirement, that will be my challenge. I think it will be a good motivator. Big Grin On the flip side I think I am going to be lazier next year. If we really maxed out both our IRAs that would be a 15% contribution to retirement, on top of my 10% work contribution. I want to get used to putting aside 15% for when my boss retires and I work somewhere that isn't so generous. Wink & I want to take full advantage of our tax-deferred ROTHs. But beyond that, it is way overkill on what we really need to do with our retirement. These are our lazy stay at home years. I am not going to kill myself over it. So I guess overall my challenge will look really different next year. I hope it's more relaxed and I will be far more focused on our ROTHs than anything.

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