January is one of my favorite months because it is bonus month! That means there is quite a bit of money to stash in savings or investment accounts or into the mortgage principal. I should be able to lop off two of my 2013 goals with my January bonus! :)
1) Emergency fund: One of my goals for 2013 was to increase this to 12 months’ expenses. I came up with that number since I thought it was a reasonable estimate of 6 months’ expenses plus replacing all the appliances and my taxable investments. I’m modifying this to cover 6 months’ expenses and replacing all of the appliances in a cash savings account. That amount plus my taxable investments should come out to about 12 months’ expenses, so I’m calling it good.
How much do I estimate to replace all of the appliances? $9,300 from this post last January. I have no real idea how old the majority of the appliances are in my place, so I’m going to assume they could all fail at any time. That old list didn’t have a hot water heater on it, which I estimate at $1,000 for an energy-efficient one on Sears.com.
- $1,000 dishwasher
- $2,000 carpet
- $1,400 fridge
- $1,600 washer/dryer pair
- $2,000 stove
- $300 microwave
- $1,000 hot water heater
This means that about $5,400 will go to my emergency fund.
2) Roth IRA: I have an estimate of what I can put in the front door (I did a sample run of my income taxes since the IRS forms are out, but I don’t have any tax forms yet), but I’m going to set aside the full $5,000 to cover the 2012 tax year contribution now, in a savings account, and then I’ll do both parts at the same time or throw the extra at the mortgage if I decide to not do the backdoor. (I’ll use a later bonus to fund my 2013 Roth IRA if I choose to do so.)
3) Mortgage pay down: What’s left of my bonus will go directly to the mortgage principal, plus the extra money from my monthly paycheck. I should be able to shave about 9 months off the mortgage with this month’s pre-payments. I have a couple of months forecasted for later in the year that should shave almost 2 years off of the mortgage in each go! Making pre-payments with the new mortgage doesn’t shave as much time off the mortgage as it did with the old one.
4) Save 50% of my net income: It looks like I am pretty much on track for this!
5) Save 100% of my RSUs: Definitely happening! See 1), 2), and 3) – I already have the whole bonus savings plan outlined.
I’m excited! I love what bonus months do to my net worth!!! :) How does January look for you guys?