Time to Clean House

Over the past few years, I’ve done a lot to straighten out my financial life. I refinanced my mortgage. I cut out cable. I put myself on a budget, and cut way back on spending. I traded in my newer car for one that I could pay off in cash. Overall, I’ve felt pretty good about my progress.

A little too good, perhaps. The problem is, I’ve been stuck on autopilot lately, feeling like I’ve got all my ducks in a row. I’ve cut a lot of excess from my budget. Despite feeling like I’ve been operating on a fairly lean level, I’m starting to realize that there are still some places that need a little work. Loose ends that need tied up. Bleeds that need stopped. So, it’s time I started doing a little financial housekeeping!

First on my list is to close out my College 529 Plan. My state offers a 20% tax credit on funds invested in a 529 plan that are used to pay for qualified educational expenses. As a bonus, there are currently no rules regarding how long that money has to be invested. I took advantage of this while I was taking courses, investing money into a plan, with the plan of pulling the money back out to reimburse myself for tuition. My financial planner recommended that I always take money out of the fund to align with the year that I was making educational payments. That way there was never a question about whether the money was used properly. Since I’ve decided not to continue on with my Masters degree, this should be the last year I’m making payments for qualified educational expenses. Which means I need to pull the money out of the fund, and close the account.

Speaking of financial adviser: I’ve been really considering whether keeping my adviser is the best idea. In the future, when I’m actually starting to invest again, I plan to take jlcollins’ advice, and invest in Vanguard Index Funds. That means I won’t be needing my adviser for future investments. I currently have a 529 plan and a Roth IRA with his company. I’ll be closing the 529 plan soon. The Roth IRA only has about $850 in it, which is mainly from interest on investments that I stupidly pulled out in my 20’s. I’ve been impressed that this small amount of money continues to grow, year after year, so I’ve never thought about moving it. But then I realized the other day: I’m paying $40 a year in fees, on top of whatever fees are built into the funds I’m invested in. That’s almost 5%! Ouch! If I’m planning to invest with Vanguard anyway, I’m thinking it’s time to research moving this money on over to one of their accounts.

The other change I’m considering is my cell phone. I have a smart phone on a plan with T-Mobile, along with a “HotSpot” for my wireless use. Together I pay $108 per month. I get unlimited texts and data on the phone, with 500 minutes. The HotSpot has 5GB of 4G, then unlimited 2G. I barely make calls, maybe using 60 of my allotted minutes each month. I just don’t really like talking on the phone. I do text a lot. I don’t use much data on the phone, maybe 1GB per month. On the HotSpot I can use anywhere from 1-6GB per month, depending on whether I download any movies.

Mr. Money Mustache has written about Republic Wireless, a cell phone company where you can get unlimited everything for $20 per month. The thought intrigues me. The catch is that you’re requested to use a WiFi connection as much as possible, and they currently only offer one phone, although more are supposed to be coming soon. I’m considering switching carriers. Along with the switch, I’ve considered switching to Verizon Wireless for my HotSpot. They have plans at around the same cost, and have better coverage in my area. Plus I’d get an 18% discount through my company.  There would be the cost of the new phone and HotSpot. I’m still doing more research, but it potentially could save me some money in the long run.

The important thing that I need to remember is not to get too relaxed and lazy about my money. There are always new opportunities to save. And every penny that I can save now gets me one step closer to financial independence!

What are some ways that you’ve been cutting extras?

– Cindy W.


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