How We Are Funding Our IRA Accounts

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One of the biggest personal finance regrets I have is that my wife and I have been neglecting our tax deferred accounts for the past couple of years. Other than my employer’s pension plan, most of our savings the past 6 years have been made in our taxable accounts.

And while we have been saving a good portion of our income into these taxable accounts (like the Money Sprout Index) … we probably could have optimized our tax savings better by focusing more on retirement accounts.

So in order to help lower our 2018 tax bill, my wife and I are now focused more on funding tax deferred accounts like a 457 plan and IRA’s. We feel this is an important step on our road to financial independence.

Funding These Tax Deferred Accounts

One of the first steps we took to put more of our income into tax deferred accounts was to open a 457 plan with my employer. Our goal is to try and fully fund the max $18,500 in this account for next year (that is if nothing changes with contribution limits).

That is step #1.

Next, we want to focus more on funding an IRA for my wife. She currently stays home with our children and doesn’t have access to any company sponsored retirement accounts. So we would like to max out her $5,500 limit for 2018 by opening up a new IRA account in her name.

In order to fund her IRA, we would like to bump up our income by a couple thousand dollars (hopefully $5,500) by the end of next year.

The plan is to work various side hustles and cut back on our spending to hit this target. Which leads me to one small side hustle we started working a couple months ago – selling items around our house on Amazon.

Another Amazon Sale

Just last week we made another sale on Amazon. Instead of selling books, this time we sold a pair of kids roller skate elbow and knee pads. The item was brand new (still in the packaging) and we purchased it on clearance over a year ago at Target with the intent to resell.

After Amazon fee’s, shipping and packing costs … this item earned us an extra $9.65. Not too bad for something taking up extra space in our house. Our total profits were probably closer to $5 if you factor in the cost of buying the item at the store last year.

This was the fourth item we have sold in the past 2 months on Amazon after listing about 30+ items in early October. The other 3 items we sold were children’s books.

In order to keep inventory costs low, we decided to sell all of our listed items as for sale by Merchant (as opposed to Fulfillment by Amazon).

Our total profits so far this year from items sold after shipping, packaging, and Amazon fee’s is – Total Profit = $16.83.

Note – At this point, it would be almost impossible to factor in our initial cost of buying the items to sell. What I can confirm is we didn’t lose any money on these sales, but our actual profits are lower than $16.83. In the future, if we start buying new inventory to sell, we will keep detailed records of the costs.

The good news is the money we earn from selling on Amazon (or anywhere else like a garage sale or eBay) will be used to fund our new Hustle Account.

And … we are also taking another step to cleaning out the clutter in our home and making a little extra cash along the way.

How We are Funding Our Hustle Account

Our Hustle Account as we are calling it … is an online checking account that was setup a few years ago. Basically, it is a holding account for funds that we will eventually start using to fund our IRA’s starting next year (2018).

Any monthly savings cut from the budget will be sent there. Along with any money earned from side hustles like selling items on Amazon will be deposited in this account. Or even bank account signup bonuses that we could earn.

Here is a quick timeline of how we have been funding our hustle account the past 2 months –

Current Hustle Account Balance – $322.89

Future Deposits

Our goal is at a minimum to raise enough money in our hustle account to fund my wife’s IRA next year or $5,500. She is a stay at home mom, works her tail off raising our children … and doesn’t have access to funding any retirement account.

My wife and I have a set of higher goals now for saving more of our income, while paying less in taxes (legally of course). So we want to take advantage of putting money away in tax deferred accounts like an IRA.

If we were to pass $5,500 of savings in this account before the end of next year … then we would start funding an IRA in my name at that point … but first things first.

So with a balance of just over $300 now, we have a long way to go to hit our goals. Here are a few future deposits we know are coming in December and at the start of 2018.

Cell Phone Plan Savings – 20% Employee Discount
A few weeks ago, I wrote a post on how we will be saving an extra $12.44 per month on our Verizon cell phone plan from a 20% discount from my employer. We already got our first monthly savings in November and another monthly savings will come in a couple weeks.

Instead of using that $12+ a month on something else … we are funding our hustle account with it. I setup a bi-monthly automated deposit of $25 now into our hustle account … the first of which will come in December (covering Nov. & Dec. savings).

I found out that the minimum automated deposit amount from our checking account is $25 … so I am taking $12.44 + $12.44 for 2 months and rounding it up another $.12 to hit $25 every 2 months.

This deposit will bring us close to $350 total balance.

Additional Cell Phone Savings – February 2018 and Beyond
We will see another savings on our cell phone plans starting in February. Our 2 year payment plan is up on all 4 of our cell phones (iPhone’s) starting early next year. A few years ago we decided to get new iPhone’s and roll the payments up (interest free) into 24 payments.

We have no plans to upgrade our phones … and are looking forward to an extra $100+ in monthly savings! Actually, I can’t wait I am so excited.

This should give us an extra $1,000+ next year to put towards funding our hustle account.

2018 Savings

Taking our future deposits we know about into account, we will need just under $4,000 additional dollars to hit our target. I feel the majority of these funds will need to come from side hustles, although we could probably trim some more savings from our budget.

One area I have been exploring is opening up more checking and/or savings accounts to get the sign up bonus. These seem to be a little more difficult than earning travel rewards but could help fund a portion of the account.

After earning any sign up bonuses, my wife and I will need to brainstorm additional ideas on how to bring in some extra cash … or as we like to call it “hustle”. Of course, some will probably come from selling more items on Amazon or eBay … but that probably won’t cover the total.

What suggestions do you have for earning a couple extra thousand dollars per year in side hustles? Are there any you have had success with and are sustainable?

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