Gave myself a raise

I’ve gone back and forth on the 401(k) issue quite a bit but I finally decided to enroll and put a 5% contribution into my retirement.  My company matches up to 4% to my 5% so I effectively just gave myself a nice 4% raise.  My hesitation to enroll at first was that I didn’t want anything to detract from my mission to pay off my debt, following Dave Ramsey’s advice to put off investing in the future until all debts are paid off.

The more I thought about it though the more uncomfortable I became with the idea of potentially not putting anything aside for retirement for another 5 years (my original estimate for how long it would take to pay off all credit card, car loan, and school loan debt).  I then thought I might at least pay off the car loan and credit cards before enrolling which would take two years.  After crunching the numbers I realized that in those two years I would be missing out on the 4% “free” money plus any interest I would be earning on the whole 9%.  By enrolling now, even if my rate of return is low, I would still end up adding roughly 11k to my account in those two years.

Besides the pure numbers, I also thought about the other factors in my life.  Life has been changing pretty rapidly for me lately and it’s made me realize that there will ALWAYS be some excuse for me not to put money away for retirement (just like there used to ALWAYS be an excuse to not pay down my debt).  The past year’s journey has taught me some valuable lessons and the biggest is that I can achieve a better financial future if I can just take one tiny step at a time!