As a Millenial, I find information for my generation’s success super interesting. That’s why I liked this article on MSN Money about how Millenials can retire tax-free with the power of the Roth IRA.

A couple points from the article about the Roth IRA and the main advantages for us Millenials.

  • There’s no tax deduction for your contribution now, but withdrawals after age 59 are tax free. By then your income should be higher, in real dollars, than at, say, 25, so your tax rate is likely to be higher, too, making the back-end tax break more valuable than the front-end one.
  • A big selling point for a Roth IRA is flexibility. Retirement is decades away and you might need cash sooner — to start a business, pay the rent while you return to school or for an emergency. You can withdraw your original contributions from a Roth IRA without taxes.

Yep! Those two alone make the Roth IRA one of the best investments for retirement after getting a 401K match from an employer. (It’s always best to contribute to a 401k first to get any match because free money is awesome!

I love my Roth IRA and contribute to it monthly. I’m trying to hit the max this year for the first time ever and am getting pretty close overall. I’ve also always loved the flexibility of my Roth IRA. While I don’t plan on withdrawing money ever again, I previously did so for a home purchase and to pay off student loans. Being able to take the contributions you put in out if you need to without a penalty is really helpful when you are younger and less able to handle the big expenses that might come up. While it’s not always recommended to withdraw money, it can be really helpful!

If you haven’t opened up a Roth IRA yet, I highly recommend you do it ASAP. You can sign up and get started today at a trusted company like Scottrade  or Vanguard. You’ll reward yourself by saving for the future and doing it within a Roth IRA is something your future self will thank you for! That money with grow and grow over the years and then when we are all getting ready to retire in 30-40 years, we will be able to do so with a nice nest egg and no tax bill!

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What I Paid, Saved, and Bought on Pay Day

by Fig on September 16, 2014

Yesterday was pay day! It’s always an interesting day for me as a lot of activity happens. Things get paid, money gets moved around, and purchases I’ve been holding off on are made. Today I’m going to share some of those little activities!

What I Paid On Pay Day

  • Auto insurance. My car insurance automatically comes out of my checking account on my second pay day.
  • Credit card. I pay several regular bills on my credit card to earn points so I paid the balance. This always occurs on the second paycheck of the month.

What I Saved On Pay Day

  • Roth IRA. It’s not much but $100 always goes into my Roth IRA every payday. That’s $200 a month which is small but adds up over time.
  • Emergency fund. Since I’m focused on building this baby up to $5,000, I sent $250 towards it’s growth. It’s now at $1,750.
  • House fund. A couple months ago I started a small house fund for the eventual purchase of a home but also for any home purchases or repairs where I’m living now. I added $50 to this account.

What I Bought On Pay Day

  • Starbucks Gift Card $25. I couldn’t resist the urge to go get some yummy fall drinks now that they are available. I’m limited myself to $25 though!
  • Starbucks Iced Coffee. I’m addicted to coffee. I know it, you know it.
  • Ziploc Double Zipper Heavy Duty Quart Freezer Bags. These are part of my frugal slow cooking ways. I made a ton of food ahead, portioned it in baggies, and froze it. It’s cheap and healthy.
  • Groceries. I went shopping since I hadn’t done it in over two weeks.

What did you buy on your last pay day?

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Bits & Pieces

by Fig on September 13, 2014

  • Today I’m thankful for a job. Sure it’s not perfect and has literally no benefits other than flexibility, but I am happy to be able to pay my rent each month!
  • I just spent $8 at Starbucks. Shhhhh. At least I’m down to going once or so per week instead of daily. Good, right? The new fall flavors got to me. I admit it. Pumpkin spice and salted caramel are my coffee spending downfall.
  • My emergency fund is up to $1,500. That’s closer to my $5,000 emergency fund goal! I’ve been trying to get a $5,000 emergency fund for years now but something always comes up. I’m lucky to keep it above $1,000 but I’d feel much more comfy with the $5,000 which would be a couple months of my expenses. I’m determined this time.
  • Did you know? It Only Takes $10,400 to be Richer Than Most Millennials.
  • Interesting article about people over 60 and student loans. It’s a big deal and something my mom faces with parent PLUS loans. Lots of older people have those and their own student loans to deal with these days making it harder to retire.
  • Retirement is on my mind so much these days because both of my parents are retiring this year. So far one has done it (went poorly) and the other is planning it in 3 months (has a good transition plan). It’s interesting to watch people navigate through this big and stressful life transition.
  • Reddit personal finance is my new favorite time waster on the internet.

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