Looking at the big picture - Counting My Pennies

I got my annual TSP (Thrift Savings Plan – like a 401(k) for government employees) statement in the mail this week.

Ouch.

My funds are not performing well. My account went down over 40% in 2008.

But there was some good news as well. The statement also highlights my lifetime pre-tax contributions. Thanks to agency matching, I’m still coming out ahead. Not by a whole lot, but hey, positive is positive.

For a while, I considered retreating to the “safe” funds in our TSP. A lot of federal employees made that move this year, but I decided to stay the course. I won’t be eligible to retire for almost 29 years, so there’s time for the money to come back. Plus I’m continuing to contribute, so I’m buying shares while they’re low. They might not go up this year or next year or even in the next five years, but by 29 years from now, I’m hoping for some big numbers.

I only contribute up to the agency match – 5%. If I were smart, I would be contributing the max, but that’s not really feasible right now, what with also putting the max into my Roth IRA and trying to save for a down payment on a home. Plus it would be a bit more emotionally taxing to see my hard earned money disappearing.

I can’t say what’s going to happen in 2009, but it’s not looking good. Who knows, 2010 might not be great either. But I’m not investing for a quick fix. This is for the long haul, and history shows that I am making the right move.

Megan Smith

Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:

In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.

While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.

Except that’s not what an emergency fund is for.

So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.

I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.

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