pendulum
It’s funny how one day I’m feeling up, the next day I’m down, and the next day, I’m right back up again.
I got my severance pay and my first partial unemployment payment today. The next two weeks are going to be so tight! It’s discouraging. But I’ve got something good going for me. First, I’m a saver - I already had a little money before I got paid in my checking account, and I have some money saved in two different ING accounts. (Have you seen their new interest rate? I’m really feeling Boston Gal’s advice to start comparing interest rates. Especially since…) I put my entire severance (plus $10 to make it a nice round number) into my "My Own Home" savings account. I now have over $5,000.00 in savings that I will try my best to not have to use.
You know how this makes me feel? Like getting a job! I just calculated my expected unemployment benefit amounts against my mandatory monthly expenses, and I see here on paper that I can make it without a shortfall. But oh my gosh - if I was WORKING?!?! I would put my bills to shame! My savings would grow so rapidly! I would be a BEAST!
Anyway, the other great thing I have going for me is my honey. I’m glad that we pared down our expenses by moving in and splitting bills. Paying a portion of the bills here is much cheaper than paying all of the bills at my old place by myself. And if I need a little help with my share, he can handle it for a while if we choose that option, since at one time fairly recently, he was paying bills here all by himself, anyway. That said, I am committed to holding my own around here, not because I have anything to prove, but because I know that if the shoe was on the other foot, my honey would not use unemployment as an excuse to stop helping to support the household if he had the means to contribute. It’s nice to have a teammate.
You know what I’ve been wondering? Whether or not I should continue paying off my debt. I’m tempted, ‘cause I was so close to finishing with my old credit card debt when I lost my job, and I’ve gotten so used to attacking debt that paying the minimum payments just feels so foolish! One thing about "doing right" is that after you start, "doing wrong" just doesn’t feel normal anymore. What do you think?
If you have at least three months’ of living expenses saved, then I would start paying extra to the debt. UNLESS your job loss will cause your income to be low enough to get a tax deduction from a traditional IRA. If that’s the case, I would put all extra to the IRA to get the deduction as well some extra money saved.
Thank you sincerely, Gecko Girl! You sent me on a hunt through the IRS publications, trying to figure out what the income cut off was, and how the tax deduction works. Now all I have to figure out is how I’d contribute money tax free to my new traditional IRA.
Comment by GeckoGirl — December 19, 2007 @ 3:14 pm
You can open an IRA with any brokerage (i.e. Ameritrade, Sharebuilder). For simplicity’s sake, you could just open one with whatever brokerage you use for your rollover IRA.
I’ve already opened it. I’m just wondering how to contribute more to it beyond the rollover amount. My understanding is that funds going in are supposed to be untaxed. But all the money I receive comes to me already taxed. So I don’t understand how to contribute additional amounts yet. I’ve got some more reading to do…
If you’re within the income limits, there’s an area on your 1040 where you will declare your contribution amount and you will receive a tax deduction.
Now THAT sounds easy!
Comment by GeckoGirl — December 20, 2007 @ 3:02 pm