I have finally opened an IRA at the ripe old age of 19, well maybe not that ripe. When I told my parents about it they expressed wishes of doing the same when they was my age. Told my significant other and just got a just another account response. But why open one now?
For starters it was super easy since I have an ING Direct account it took less then 5 minutes to setup and fund a new Traditional IRA. Which I didn’t choose the Roth IRA since the Roth isn’t tax deductible, instead when you withdraw the money you don’t pay taxes. This is opposite of the Traditional IRA where you deposit money tax free and what you withdraw is taxed at your current tax rate, which is hopefully lower. Now if my income rises then I see myself opening a Roth IRA also to balance it out.
In addition I believe I have at least a draft of my 2013 budget. The biggest change will be the addition of a college/WKU category. I believe if all my math is correct that saving back $470 each month between now and May of 2015 I should leave Western with about $60 in the account. Unless I can get some scholarships which I’m in the process of applying for.
I have also combined a part of my business income/expenses inside of my budget since what I’m paid is proportional to my business’s income/expenses. The only things I do not have included are infrequent like once or twice a year expenses, but so long as I have a general plan is what matters at first. I can always improve it if I need to. Which if I can increase my income in 2013 to pass this year’s income then I will be able to pull off my budget and my WKU savings goal.