This month has been a huge money drain. I’ve been killing myself trying to play catch up with my 401k and Roth IRA contribution. As I’m doing so, regrets crept in. Why didn’t I start contributing earlier in the year? Oh, that’s right. Because I was too busy keeping my money trapped inside a savings account waiting to buy a house.

In the midst of going crazy trying to contribute thousands per month into my retirement so I can be on track to max out my contributions by the end of the year, I realized that I lost out on the gains I could’ve made had I contributed earlier. 

But honestly, the biggest loss is the amount of money just sitting pretty in my savings account, waiting to be used when I close on my house that has been left uninvested for the better part of the year.

The S&P 500 is currently up 18% this year to date. I projected that between the money sitting in my savings account and the delayed retirement contribution this year, I’ve lost out on at least $10k gains in the first half of 2021 alone.

Last year I made almost $17k in passive gains from the combination of my 401k and Roth IRA. For reference, the S&P 500 finished 2020 with a gain of 16.26%. This year could have been even better for me.

The only saving grace is that I decided not to pull any money from my 401k or Roth IRA to fund my down payment so at the very least I’ll be able to match my returns from last year as long as the market continues to go strong this year.

That’s not to say I regret buying a home and I do believe that real estate is also a sound investment to diversify my portfolio. I just think that when so many people are clamoring over how much their houses are now worth in this crazy seller’s market, not enough is talked about how much saving for a down payment can actually cost you and how much the good old boring index fund can return. There is absolutely an opportunity cost in buying a home.

The End of the Road

On a slightly sad news, my per-diem job at retail has officially come to an end. It was bittersweet as retail pharmacy has always served as a safety blanket to me, but I know deep down my heart was just not in it anymore. I haven’t taken a shift in months so when my district manager told me they were restructuring and they wouldn’t be able to keep me on anymore, I didn’t fight it.

I’m much happier at my current job and cannot even imagine going back to retail full time so even if anything happened to my current job (fingers crossed that nothing will!), I most likely will seek out employment outside of retail anyways.

I did receive my final paycheck this month which consisted of the payout on my PTO balance which is the only reason I was able to go crazy in my Roth IRA contribution this month (more details in the budget section).

Student Debt

Not much progress in paying down my student loans especially as I’m expecting my mortgage interest rate to be higher than my student loans so I’m not in any rush to pay it off. I’m just continuing my minimum payment of $880.77 to my private loan.

I’m also continuing to take advantage of the COVID-19 forbearance on my federal loans so I have not made any payments there since March of 2020.

Student debt paid this month: $880.77

Student debt remaining: $40,703.85

I house every month’s debt progress from the very beginning here if you want to check out the progress so far. With my projected $880 payment, it looks like I will finally be out of the $40k’s zone by next month!

July Budget

Fixed Spending

As noted since February, my parents and I agreed that I would postpone any monthly payments to them while I am in the midst of the home-buying process. I will instead continue to save up and resume payments once the home-buying process is complete.

Other than that, my cell phone bill and Netflix make up the rest of my fixed spending.

Variable Spending

Gas – Gas prices suck. That’s all.

Entertainment/dining out – A family member is staying with us this month so we’ve been dining out quite a bit hence way over budget.

Groceries – Extra mouth to feed so extra grocery cost this month.

Shopping – Some personal care items and some Amazon shopping.

Miscellaneous

Blog renewal – In a blink of an eye, my blog renewal fee came up and since I’m now past my 3 year renewal with Bluehost, I’m no longer on the discounted rate. I considered switching over to a different host or even to give up my domain name and go with a free hosting site like Blogger. 

However, I’ve really had no issues at all with Bluehost and I think the amount of work it would take to move everything to a new host was not worth it for my lazy self. So in the end, I renewed for another 3 years. 🙂 I figured since I’ve paid for the next 3 years already, it’ll motivate me to keep this blog alive and to keep up with the updates.

Savings

I’m still automatically allocating $1,000 to my savings account each paycheck. I also restarted my Roth IRA contribution last month.

My plan was to go aggressive and contribute $2,000/month for the months of June, July, and August and max out my Roth IRA by the end of August. Well, I got too aggressive and ended up contributing $3,000 this month which means I only have $1,000 leftover to contribute next month. I figured time in the market was better than trying to time the market.

Goals for Next Month

If things go according to plan, I will have my Roth IRA maxed out by early next month. I’ve been increasing my 401k contribution the last few months so that I’m on par to max it out by the end of the year.

However, I’m starting to re-evaluate my strategy and am hoping to go hard these next 3 months with my 401k contribution so that I can ease off in November and December which is when I’m anticipating that I’ll be able to move into my home. At that point I’d like to have access to greater take home pay for furnishing the house and anything else that may come up.

So starting in August, I will be putting 35% of my pre-tax salary straight to my 401k. It’s very ambitious so we’ll see how it goes. Unfortunately, my checking account will have to suffer for a while longer while I max out my 401k.