Friday, August 1, 2008

Single Step Personal Finance Challenge

Andy from Saving to Invest, tagged me with the "Single Step Personal Finance Challenge" blog meme started by Mrs. Micah. The challenge is to "find one step you can take to make your financial system better or more organized."

Andy's single step was to open up a Roth IRA account. My only real commentary on this is that I typically contradict the common investment advice to contribute early to an IRA. I don't contribute to my Roth IRA until the end of the tax year so that I can know for sure that I qualify. A person's eligibility to contribute to a Roth is determined by their AGI in the contribution year. Since it is impossible to completely predict future income, there is always a possibility that one will exceed the Roth IRA income limit. If this happens, one must either withdraw the excess, or face an IRS penalty. In either case, this would involve some messy dealings with the IRA custodian.

Anyway, on to my single step... Readers who saw my post about Money Market Interest Rates are aware that I was considering closing one or more of my bank accounts that is paying me a lower interest rate. I've done just that. I closed my Guaranty Bank money market account, and moved the money to Washington Mutual. In one step, I am now earning 1% more interest on my money.

Although I agreed to humor Andy and Mrs. Micah with a response, I thought that this blog tag meme was a somewhat silly one, and have decided not to tag anybody else.



Andy said...

Thanks for feedback on Roth, good suggestion at doing it near the year end.

Fair comment about the tags, most time sthey are just a presence building activity.

ad said...
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lulugal11 said...

I have simplified my finances by eliminating some of the subcategories I had in my budget.

I was tracking Fruits, Vitamins and Bread instead of just tracking Food.

Now I have less categories and it is much easier.