Roth IRA Challenge: How We (Could Have) Fully Funded an Account

We’re starting a new guest series. I’ve wanted a way to highlight awesome people and awesome bloggers. So, I issue a challenge: The Roth IRA challenge is about documenting how you found or earned an extra $5500 and what you did with the money. It’s called the Roth IRA challenge because that is enough to max out one Roth IRA in a year though I realize most people will have other specific goals for that money. Today, our friends over at Two Cup House kick off the challenge. Enjoy! Over to you, Claudia:

Roth IRA Two Cup House

When we kicked off our personal finance journey exactly one year ago this month, we started by addressing the most obvious area: spending.  After cutting our spending significantly and setting a realistic budget we could live with, I imagine that we could have met the prerequisite of this Roth IRA challenge within a few months.  But we had other plans for our cash.

In October 2015, the promotional rate on our credit card balance transfer was going to expire and we had $10k left to pay off.  Cutting our spending alone wasn’t going to help us pay off this credit card balance in time and we had nothing in the way of emergency savings.  Our investments were (and still are) limited to traditional retirement accounts.  And with penalties and taxes, we didn’t want to draw on our retirement accounts in order to pay off debt.

When faced with financial difficulties prior to 2015, my default position was to get another job (or two).  I never considered the possibility that I had a problem managing cash flow that I could have easily fixed by cutting my spending.  Rather, I secured consulting clients whenever I needed to make extra money.

By spring 2015, we finally started to figure out personal finance!  But even with significant spending cuts and frugal living, we knew we weren’t going to be able to off our credit card balance in time.  So, I did what I always do in these situations and I started hustling.

As a digital marketer, my skills are always in demand, so finding clients has been relative easy.  Sometimes, I find clients by way of referrals from past clients.  Sometimes, I walk into small businesses and offer help to the owners, i.e. door-to-door style.  Sometimes, I overhear people talking about digital marketing and I casually insert myself in their conversations to see if I can generate any leads.  And then sometimes, I hustle the old-fashioned way: Craigslist.

By March 2015, I hustled and found one of my all-time, favorite clients, courtesy of Craigslist.  It’s a local business, half ecommerce and half content marketing/affiliate marketing.  I knew this was going to be a win-win situation all around when they offered me commission-based compensation for my SEO work, because as traffic increases, sales and compensation increase for everyone!

Here’s a breakdown of the first $5,500 I earned from just one of the client’s revenue streams: ecommerce.

April 2015: $833.56

May 2015: $787.40

June 2015: $1,165.32

July 2015: $1,182.27

August 2015: $1,142.42

September 2015: $1,283.86

Actually, this amounts to $6,394.83 and it’s my commission from just one revenue stream.  In the same span of time, I helped my client ramp up her affiliate revenue, which accounted for about half of total revenue (and more than half of my compensation).

Because side hustle income was money we didn’t need for our day-to-day expenses, we applied every check to our credit card debt and paid it off before the promo rate expired.  However, if we didn’t have credit card debt, we would have had the option to fully fund a Roth IRA.

Though there were many, many lessons learned in the last year, I think the single greatest lesson I learned was how to manage money.  IMHO, it’s critical to have spending under control, maybe even a budget established, before trying to earn more—I wouldn’t recommend trying it the other way around.  🙂

Isn’t that great? Claudia and Garrett have earned their money side hustling in SEO and they are actually kicking off a course next week teaching people how they can do the same! You can sign up for their course email list to be notified when it goes live!

Will you be taking the Roth IRA Challenge?

Roth IRA Two Cup House

Disclaimer: This post may contain affiliate links which, at no cost to you, helps support Northern Expenditure and keeps our heat on in the winter. Thanks!

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13 Comments

  1. Claudia! This is amazing. Only one revenue stream produced over $6,000? I’m very excited for your new course to launch! My fiance & I keep debating on how we can ramp up extra income streams, but find the time management aspect hard when we work full time & still want to relax too. Thanks for sharing your story!

    Maggie – I believe I am going to take this challenge on! For one, my eligibility at my new employer for our retirement plan doesn’t kick in for quite some time. I’m missing out on all those auto-deposits I used to have at my old employer! Right now I have a Traditional IRA, but I think I’m going to start a Roth IRA and start making my contributions there! Very awesome challenge!

    • MaggieBanks

      ABSOLUTELY take the challenge! When you’re ready to write it up, let me know! Isn’t Claudia so inspirational? Sheesh! That’s some great side income!

    • Alyssa, you highlight a great point about time management. As awesome as it is to earn extra cash, time off is important, too! I decided to start waking up early to prioritize self-care, like reading, going to the gym and stretching–this really helped me maintain the balance with my side hustle.

      • MaggieBanks

        I am always a bit jealous of your schedule. My main hustle (3 kids) has very weird hours. 🙂

        • Having kids, a job, a blog and you’re minimizing, organizing and more–how do you do it all?! I think you’re the real inspiration. 🙂

          • MaggieBanks

            Hilariously, I can tell you that! There is never a dull moment around here. Very little quiet contemplation. 🙂

  2. seattlegirluw

    Once we can pad savings a bit more, I’m going to be funneling any extra funds toward finishing funding a Roth and then opening a SEP. I want to be able to fund that by next year if humanly possible.

    Right now, though, we’re just trying to stabilize our finances now that our budget is $766 lighter. Bright side: Once we get that back, it’ll nicely fund a SEP!

    • MaggieBanks

      If you want to take the challenge, I would love to feature you and your blog documenting finding/earning an extra $5500 and what you did with the money. Just let me know.

  3. I love this idea. I backed off my side hustle for a while, but now I’m going to see if I can grow my tutoring income to about $500 a month. I’m also trying to get more aggressive with (re)selling. It’ll be no where near $500 a month, I don’t think, but I can dream right?!

    • MaggieBanks

      Start tracking! When you hit $5500, let me know and you can be featured. 🙂 You got this!

  4. Claudia, that’s amazing! I can’t believe how much you were able to make just off of this one gig!

    Maggie, I love the idea, but I’m not sure I can participate since I don’t think I’ve ever randomly found or earned $5500! But I will think about it. (Maybe I once found $5500 and forgot about it? Lol.) 🙂

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