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Ended my 401(k) challenge

February 12th, 2009 at 05:58 am

I just looked at my budget and proceeded to dial back down my 401(k) contribution. I did it now because it takes more than a week before the new contribution setting will kick in.

This also means I'm just one week shy of meeting my challenge. So then, the question is why did I stop the challenge early?

For one thing, I just bought some suits. Yeah, it was a bad time to be making large purchases of any kind, but in all honesty, the suits were a great deal, a great investment, and I really do need business attire of some kind for work.

Another is that I underestimated how much my cost of living would be. This is something important that I learned during this challenge.

You see, my original calculations were based on the idea that I had lost my job and that I would slash all of my living expenses to the absolute bare bone. But for a short-term challenge like this one, I didn't see the point of dialing down my bills only to bring it back up.

More importantly, I did try to cut back somewhere, but realized that there isn't much to cut back to begin with. Everything on my expense is a "need", including a cellphone (the only line I have) and internet (needed to search for a job).

So, instead of cutting back somewhere, I am faced with the grim reality that my EF should be a lot bigger than I first imagined. Then again, it's better to realize this now than to find out the hard way, in the event of a real emergency.

On the bright side, I've accelerated my 401(k) contributions greatly for this year! That's the goal, and I think that goal has been a success overall.

Once I move on to the new employer and 401(k) in March, I will be plowing full speed into replenishing the cash reserves. My EF right now is down to my minimum comfort level and I really, really do not like having it this low.

5 Responses to “Ended my 401(k) challenge”

  1. LuxLiving Says:

    Congratulations on a job well done!

    I hear you on being at the cutting edge of the bone already. We're going to be cut about a third with Hubster's unemployment checks so, it's going to be interesting as to where I'll find to cut since it seems we're close to the ragged bone already!

  2. scfr Says:

    Nice job. I think it's important to adjust goals as circumstances change, rather than setting a goal and stubbornly sticking to it even when the reasons for setting the goal in the first place no longer exist!

  3. Aleta Says:

    Sometimes you can set up what you think living expenses would be and be surprised at how off you were. Budgets are for tweaking. I think that this was not really situation. You are living temporarily knowing that your situation will change fairly soon. I think it gives you a renewed interest in really knowing what you need to do if you were in an emergency.

  4. thriftorama Says:

    If you really want to sock away money fast, you might want to consider a No Spend Month. Hubby and I did one and we socked away a lot more cash than I thought we could. It gave us a quick bump in the emergency fund.

    We budgeted $400 for the month for food, gas, and anything that wasn't a monthly bill. Your amount could vary. It was a challenge, but not as hard as I thought it would be.

  5. Broken Arrow Says:

    Wow, you supported an entire household on $100 a week? That's really impressive!

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