Hi!
Although I've posted a case study in the past, our financial situation is changing enough that I would love some feedback. All numbers below are the projected budget for our new situation
Life Situation: Hubby (30) plus me (28) and 3 kids (4,2 and due in November). Married filing Jointly
Gross Salary/Wages: Husband makes $87,000 and I will be making $15,000 working 2 days/week. Total from regular jobs $102,000 gross.
Pretax Deductions:
401k-DH contributes 6% ($5,200) and his company matches 5% for a total contribution of $9,600. This is a new benefit in 2017
I put in 50% of my pay ($7,500) and my company matches 25% of all contributions for a total of $9,375
Total contributions to 401k: $18,975
HSA- DH has access to a HDHP and an HSA this year. His company puts in $1,000 and we will be putting in $6,700 for a total contribution of $7,700
Insurance: $170/paycheck for the HDHP for a total of $2,040/year
Daycare Flex Spending: $5,000/year
Rental Income: We own a rental property that brings in $400/month after all expenses. This goes straight into a savings account for future rentals/repairs so we don't count it as income.
DH's Side Gig: He runs a resale shop on Ebay. Currently pulls in an average of $500/month but can obviously fluctuate widely. We currently save this money in our rental account.
I show that with all of those deductions, we should be claiming 8 or 9 on DH's paycheck to minimize our tax refund. This would make his take home pay $2089/paycheck or ~$54,300/year. My income is $275/paycheck or $7,150/year for a total income of $61,450/year.
Expenses
Mortgage: $1700/month 20,400/year
Daycare: $972/month until September 2017 when 4yo goes to public school, then drops down to $700/month $4000ish a year once you take off Flex Spending reimbursement
Tithe to church: $800/month (non negotiable) 9,600/year
Grocery/toiletries: $450/month 5,400/year
Gas: $200/month 2,400/year
Extra Curriculars for kids: $50/month $600/year Swim lessons, soccer etc
Dog food: $30/month $360/year
Netflix: $8/month $100/year
Internet: $50/month $600/year
Restaraunts: $100/month $1200/year
Miscellaneous: $100/month (haircuts, kids clothes etc) $1200/year
Car Insurance: $75/month 900/year
Life Insurance: $75/month $900/year
Gas/Electric Bill: $150/month on average $1800/year
Cell Phones: $125/month $1500/year
Savings:
Miscellaneous savings (home maintenance, eventual new car purchase etc) $150/month $1800/year
529 Savings: $225/month ($75/kid) $2700/year
(Mentioned above) $400/month from rental $4800/year
(Mentioned above) $500/month from DH's side gig 6,000/year
Current Liabilities:
Mortgage (just refinanced to 3.5%) so 30 years remaining: Balance of $274,000. PITI payment is $1700/month
Rental Mortgage rate of 4%, 27 years remaining: Balance of 44,000
Current Savings/Assets
House: Worth $350,000
Rental Condo: Worth 90,000
My Traditional IRA: $7,205
DH's IRA: $51,000 in Vanguard
My 401k: $62,000
Rental Account: Current balance $15,000 in Capital One earmarked for new rentals or repairs on the current one.
General Savings Account: $5,000
Kids 529s: Total balance of $5,000
Questions:
This is the first time I'm cutting my hours so drastically in an effort to maintain more of a work/life balance. I love my job and my company so I don't want to leave completely even though there is definitely the financial reasons to just stay home.
That said, does the budget look okay? We're pretty frugal and have been doing this budget for awhile but i'm just nervous with the ambitious savings goals and the fact that we're going to a HDHP as well as cutting hours and having a newborn at home again.
DH wants to quit working in 10-15 years. Do you see this as possible? He can always up his side gig, but I know kids will also become more expensive as they get older so it may very well even out.
There is currently around $5,000 "extra" in our annual budget that we plan to throw into our IRA's but I'm hesitant to earmark it for that since I don't want to run things too close. My question on this part of the budget is do we just do it and if we hit any financial difficulties reduce the amount we're putting in? Should we save it until the end of the year and then make a lump deposit into IRA's?
I want to save as much as possible but also don't want to be too ambitious and then sink.
Congrats if you've made it this far! Pregnancy brain/nesting has me wanting to double/triple check everything and you guys are the experts!!
Thanks so much!
ETA: Just realized I didn't add in the reimbursement for Daycare FSA and subtrace the daycare numbers. So, it turns out we'll have approximately $5,000 extra to throw at IRA's or just save somewhere else.