[CHO at KD, Inc.]

Here are some things to consider as you make your plans….

– An IRA account allows you to contribute about $5,000 per year. Most have a minimum start-up balance of about $1,000. Look for low fee funds – Vanguard is always good on that account.

– If you plan to stay self-employed for a while, maybe consider a solo 401k plan at some point. These have really generous contribution limits because you can contribute as an individual (up to $18,000!) and also as an employer (generally up to 20% of net income). There’s a bit more admin and set-up, though.

Since income is bumpy, maybe set a goal of making a quarterly contribution to whichever plan you go with? That way, you can save up a little each month but also make sure you’re covering your other expenses and emergency funds.

[CHO at KD, Inc.]

Kayla – right there with you! I have a 10 year old and 7 year old twins. We’ve had and will keep having lots of family celebrations 🙂

Here’s a couple of things I’ve learned:
– Don’t be afraid to borrow. Ask neighbors and family nearby if they have folding tables/chairs they can bring so you don’t have to rent them.
– Watch for sales at party and craft stores (Michael’s and Party City are two of our faves) and stock up on fancy paper plates and decorations when things are on sale or when you see a great coupon come out. It feels like a lot of planning to work around their promotions, but its SO worth it. This Halloween, I saved $35 on costumes just by buying the right day 🙂
– Costco is actually worth the membership fee, at least for us. Between savings on gas as well as being able to buy party food at really good discounts, it pays for itself. One example – for my 10 year old’s birthday we had to make goodie bags, right?! Ugh – that’s a whole topic in itself. Anyway – I was at Costco and they had 6 packs of EOS lip balms. 10 year old girls (and me!) love their EOS. So I bought them to inlcude in the goodie bags. It worked out to $2 per lip balm, I think. I was at Target later and each lip balm was $2.99. For the quantity I purchased, I saved $15!!
– The dollar store is also your friend! Cute decorations, doo-dads for goodie bags, etc.

Good luck and congratulations on your little one and all the exciting events to come!

[CHO at KD, Inc.]

And it also really drives home the point about starting early! A little bit socked away in your 20s has a huge impact if you let it roll. I’m in my 40s now with 3 kids and I am SO glad I started putting money in a 401k when I was in my early 20s. It wasn’t much, then, but it definitely has formed a nice foundation to build on!

Keep watching that nest egg grow and feel great about it!

[CHO at KD, Inc.]

The national average is around 3%. So, for budgeting purposes, maybe that’s a good place to start? Totally agree with making sure that our possessions get a second life, though, too. That’s a great way to give back and keep things out of the landfill, too.

You can also use sites like Charity Navigator to help you find organizations to work with if you’re looking to branch out.

[CHO at KD, Inc.]

My kids are a little older (10, 7 and 7) and they are really starting to understand “cost.” I do think that at these early ages it’s about helping them understand the value of money and how far it does (or does not!) go.

It’s really helpful to take them with when you have to buy a birthday present for a friend or family member so that they start to understand what all those cute, cuddly or light-uppy things cost! One of my favorite “exercises” is to talk with them about what $20 can buy: it can buy this 1 item, or these 2 items but not this other one because it’s a lot more. They start to get the idea that money is finite!

[CHO at KD, Inc.]

Hey Antoinette, I love it! At a certain point, you just don’t need any more stuff and yet our friends and family want to do something for us. I think this is super-smart. Well done!

[CHO at KD, Inc.]

Hi Antoinette, you’re wise to consider this *before* making the move! The good news is that there are definitely great options for self-employed/small bizness owners when it comes to retirement. In my case, I have my own consulting practice and I set up a solo 401k. It works exactly the same as an employer plan – there are individual contributions and employer contributions – except, of course, that it’s ME in both of those cases! The contribution limits are generous – for the individual it’s $18,000 and as an employer, it’s up to 20%ish of net profit (I say “ish” because there’s some math to do to figure out the exact amount). The total combined contribution is in the $50,000 range. It’s actually an amazing way to sock it away (even catch up, like I had to) because of those generous contribution limits.

Vanguard has a really good comparison on their site: https://investor.vanguard.com/what-we-offer/small-business/compare-plans?Link=facet

Good luck!

[CHO at KD, Inc.]

So great that you’re thinking about this! As a self-employed person for the last 11 years, it took me a long time to tackle my retirement plan.

I found Vanguard’s small business site (and its comparison between the options) to be super helpful. It breaks down the advantages and the eligibility requirements for the various types in an easy chart.

I ended up choosing the Solo 401k because it allowed me the highest contribution amount – $18,000 as an individual and then also an employer contribution* on my own behalf (more on that in a moment). This was key to helping me catch up from my hiatus from retirement investing. And, since we don’t have any employees (and my business partner is also my spouse), this option works for us. It does come with a little more administration since you are responsible for making the contributions yourself.

*The thing about employer contributions (you, as the employer, on your own behalf) is that there’s some pretty detailed math that takes into account your net profit, self-employment taxes, etc. I found it absolutely worth it to spend the time on the calculations, because it works out that I can contribute in the neighborhood of 20% of my net income as the “employer” (and that’s in addition to my individual contribution.)

In addition to feeling better because I’m now contributing toward my future, the tax ramifications were HUGE. I ended up eliminating one whole estimated tax payment per year! A 25% reduction in my tax liability. Yes, please!

Good luck and let us know how it’s going?

[CHO at KD, Inc.]

The idea of a “reset” or “reboot” is great. I’ve done the same thing with coffee – dropped it for a while. It really makes you appreciate that next cup!