The last day of February is always one of my favorite days of the year. Since 2004, my wife and I have front-loaded our retirement accounts with our January and February paychecks. By paying ourselves first to the extreme, we have been able to accelerate our wealth building. This year we’re both hammering our 457 accounts to the tune of $4,000 a month. So far this year, we have contributed $16,000 into our 457 accounts…that sure puts a spring into my step!
Since we were rolling in the dough last month, we also decided to knock out some of our 2015 financial goals. Here is what we did:
- We sent $1,750 to our son’s Coverdell ESA at Vanguard to max out the 2015 contributions. His ESA now has over $31,000 invested in the following funds: VTSAX and VTIAX.
- We dropped $180 into our son’s UTMA account at Vanguard where we’re automatically investing $10 a month ($120 a year) in the LifeStrategy Growth fund (VASGX). This means our 2015 UTMA goal of $300 is on track.
- We finally opened a taxable mutual fund account at Vanguard! We invested $1,000 in the Target Retirement 2060 fund (VTTSX). We chose this fund primarily because of its low minimum investment ($1,000) and low fees (.18%). We also like the fact that this fund uses index funds and automatically provides us with an idiot-proof, diversified asset allocation.
Financially, our year is off to a great start thanks to the PYFX* method. Like I’ve said before, there’s no magic to this…it’s just good ole hardcore savings.
Is anyone else out there front-loading their way to financial freedom?
* Pay Yourself First to the Extreme