In the blink of an eye, my overtime income that I blogged about two days ago is gone. Rest in peace, hopefully we will meet again.
Where did it go?
I’m glad you asked.
As soon as I learned the opportunity for overtime was available, I immediately began deciding how to purpose this new found income.
And like a true personal finance nerd, the result was about the most boring thing you could possibly imagine.
While I’d like to pretend you didn’t see that coming, I imagine you nerds would have been just as nerdy and probably done the same nerdy thing.
Seeing that I have no idea how long this overtime option will be available to me, I want to make sure I take advantage while I can.
For now that means I’ll be throwing $1,600/month in to my 401k instead of the $600/mo I have been doing.
Since my agency matches 5% of my income each month, I have to be careful about how fast I max out my 401k.
If I hit the $18,000 limit by, let’s say August, then I would no longer be allowed to contribute to my 401k for the rest of the year (September to December). Which means, my agency wouldn’t be able to provide me a 5% match (since I’d no longer be contributing).
Or in other words, I’d lose out on about $2,000 of 100% FREE MONEY.
No way in heck I’m going to let that happen, so even though the overtime I’m working should theoretically gross me an additional $2,400/mo. I’ll only be throwing in $1,600 towards my 401k.
Leaving me with about $600ish dollars to tinker around with after tax.
To make sure things don’t get too exciting around these parts, I’ll probably just set up an auto-transfer and have that extra money go straight to my brokerage account.
Sexy by the worlds standards? Hardly.
Sexy by not-being-an-idiot-with-new-found-money standards? Absolutely.