Hello all. I'm just out of college (finally) in January, and my wife and I have recently gotten married. We are starting our life on what I consider to be good footing. However, considering that we both have student loan debt, I don't want to get complacent, and I reeeeeally want that debt gone in the quickest time-frame possible (~3 years hopefully). Help me pick places to trim the budget!
My wife is getting her Masters right now, but that ends in exactly 1 year, after which she will be working as well. After that, we can throw her entire salary (probably ~30K starting) into loans, but I want to make progress until then as well.
Income: $3400/month take-home, $71,000/year salary
Assets:
401K: $3550 (new job)
Emergency Fund: $1000 (recently depleted by car purchase)
House Fund: $10,000 (we are trying to buy one within 2 months)
Cars: 2005 Ford Focus and 1999 Pontiac Grand Prix
Liabilities:
My SL: ~$30,000 @ 6.8%,
Her SL: >$60,000, in deferment (don't have the exact details, but I know it's much larger than mine thanks to private uni)
Savings/Payments:
401K: $590 (10% for full employer match)
Replenish Savings: $500 (Want to get it back to $4000 minimum, then this goes to loans again)
Student Loans: $600 ($400 min right now, extra to principal)
HSA: $100
Total: $1100
($690 is pre-tax, and doesn't come out of take-home budget)
Fixed expenses:
Rent: $705
Internet: $30 (smallest internet available >.< 5Mbs)
Netflix: $8
Pandora: $3
Phones: $20
Car Insurance: $30
Health Insurance: $155 (hopefully down to ~$100 when a credit from work kicks in)
Total: $921
Variable Required Expenses:
Gas: $200 (Reduces by ~half if we buy a house)
Groceries: $300 (Goal: $200. Includes pet food + litter)
Electricity: $70 (all electric appliances, ~15Kwh / day)
School: $100 (books for wife's grad school)
Car Other: $50 (Pontiac has occasional issues these days, + maintenance/oil)
Animal Care: $30 (1 dog, 2 cats, 1 lizard. For vet/flea+tick, not food)
Total: $570
Luxuries:
Eating Out: $50 (1 nice meal a month)
Clothing: $50 (wife wants to have some work clothes over next 3 months. Hopefully thrift shops will keep this lower)
Total: $100
Recap:
Income: $3400/month
Current Expenses: $2691/month
Extra goes to either savings or loans depending on current state of affairs.
Obviously, we have some fat in the budget (Food, gas, and all luxuries). I'm currently trying to take control of the food issues (I'm the cook, but she's the picky eater :p)
One specific question that I have is about the house purchase. We are currently renting within walking distance to my wife's grad school, which leaves me with a 20 mile commute. This was done on purpose last year, since it meant we were fine with 1 car and minimized driving as much as we could. However, now my wife has started a practicum on the same side of town as me, and car/gas expenses have gone up accordingly. Considering she only has actual classes 3-4 days a week, but we will work a combined 8-9 days a week, we are trying to move up to work when the lease is up to reduce gas (I can finally bike to work again!). We are looking at ~$100K homes near our workplaces, and have found/begun inquiring about a few. We only have ~10% down, so we will be stuck with PMI for about a year, but I hope that reduced car expenses will help make up for that. PITI on the house looks like it would be ~$50 more a month than current rent with PMI, then less after a year. However, with the older houses that we are looking at I expect to be putting $100-$200 a month into upkeep/repairs for about a year. In all, I think it's a financial wash, or slight increase, that manages to reduce car use in the long run, but let me know what you think. Oh, and I finally get a yard again :)
For reference, I have looked at buy vs. rent in our area, and we come out ahead after about 2-3 years. We plan on staying at this house for ~7 years while we eliminate SL debt, increase savings, and have a kid or two. After which we may move to a better school district (the one near the home/work area is literally rated... 1/10 according to most reviews. Just 20 minutes north? 9/10)
I am also currently struggling to convince my wife to reduce AC usage (a large portion of our electric bill right now.) She wants to keep it set to 72f at all times, even when the weather outside is nice. She's so against natural cooling that she hasn't even wanted to let the recent cold snap (~60f outside at night for the last 3 days) cool the apartment for us at night. I want to try and change her mind on this, as the houses we are looking at are a bit bigger than our apartment and so would require more cooling, but she's very set in her ways (her parents keep the house cold enough in summer that I bring a jacket over there with me).