Roth IRA Challenge: Creating My Kaleidoscope

Another awesome blogger took the Roth IRA Challenge! Here’s Harmony Smith from over at Creating My Kaleidoscope to tell us about how she added $5,500 (the amount of money it takes to max out a Roth IRA) to her budget and what she did with the money:

Debt sucks. We’re still deep in the hole, but working hard to dig ourselves out. 2015 was a pretty momentous year in that we welcomed our third child into the family. I was pleased to look back on our finances and realize that we were able to pay off more than $20,000 in debt over the year, despite taking extended parental leave. Our success was due to the combined effect of saving money and increasing our income. This is how we came up with $5,500 of our debt-repayment money, an amount which we’d much rather be investing in a Roth IRA.

How We Saved Money

We’ve been doing a lot of the basic stuff for several years now, like cutting cable and not going out to eat. There are other things that we did to save money, which are a little harder to quantify, like gathering firewood and growing vegetables in the garden. Here are a few other ways we saved money last year:

We switched cell-phone providers. After taking into account the purchase of new (to us) Republic Wireless cell phones, we saved over $700 by switching from Verizon.

We didn’t buy any baby formula. Our little guy was exclusively breastfed (almost one year now!). There are a wide range of formula-cost estimates online, but it’s fair to say that we saved at least $1,000 by not buying formula.

We were able to save over $200 over the year by making our own bread. It’s healthy, delicious, and super easy and with our handy, dandy bread maker.

Daycare for our youngest two children costs a total of approximately $80 per day. We used some creative scheduling so that the youngest two only have to go to daycare three days per week. I work from home one day per week. With regular help from different family members, I get a few hours of work done that day and make up the rest of the time over the weekend or on evenings. Mr. Smith stays home with them one day per week and tries to get us caught up on chores around the house. I’m a salaried employee; he is paid on an hourly basis. So with this
category, I’m only counting one day of saved money per week. Still, that means we saved $1,280 between September and December.

Total of Money Saved = $3,180

How We Made Extra Money

We have a bunch of little side hustles on the side to earn the extra money that we need to pay off debt. The biggest one is tutoring. It is a specialized type of tutoring, based on my professional education. I can do it online, during two different sessions each year. I took on a number of additional students while out on maternity leave. My total earnings from this side hustles were over $4,000. In addition to covering some non-paid time off from work, the tutoring provided us
with enough extra money to meet the $5,500 limit on Roth IRA yearly investments.

I truly believe that everything happens for a reason. The purpose of the debt is to teach us how to better manage our money. We’re learning how to live a frugal lifestyle and hustle to increase our income. In the hopefully not-so-distant future, we will be able to make our money work for us, instead of just repaying debt. Then, we can reap the reward of our diligence: freedom.

If you would like to take the Roth IRA Challenge, let me know! If you have earned or saved $5,500 above your original budget, document how you earned each dollar, what you learned in the process, and what you ended up doing with the money (It’s called the Roth IRA challenge because $5,500 is enough to max out one Roth IRA though we realize that is not what everyone will do with the money).

Roth Ira Challenge Creating my Kaleidoscope


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  1. Thanks for featuring me! I love the picture you found, it’s perfect 🙂

  2. Way to hustle and live frugally, Harmony! Nice work! 🙂

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