It occurred to me that it's been several months since I provided a status update. It's about time I did something about that. Also, we have new questions (assuming you make it to the bottom of this post)!
Thanks to the help of everyone in this thread our situation has improved dramatically. We are now running a monthly income surplus and our debts have been restructured to reduce interest and facilitate their rapid payment. We are on track to knock out our higher interest debts with the year and start saving even more.
I've updated the case study from my OP below and highlighted in bold any values that have changed significantly.
We were able to find a cheaper rental, saving us $400/mo over our previous place.
Our adoption loan debt was refinanced mostly through an auto equity loan to 3.5% with a remainder at 6.99% through a traditional loan.
Our CC debt was moved to a balance transfer card with a 12 month no interest pay back period.
All of our IRA accounts were transferred to Vanguard and are currently invested in low cost index funds.
We received a sizeable tax refund, thanks to a federal adoption tax credit, that became our emergency fund.
Life Situation: Married Filing Jointly, wife and 2 children (ages 3 and 1.5), 34 living in the North Shore Area of Massachusetts.
Gross Salary/Wages: $70,200 bi-weekly + a yearly profit sharing bonus that is equal to ~35% of my base salary. Wife is raising the kids full-time
Pre-tax deductions: 401k - 10% with 10% employer match
Other Ordinary Income: NA
Qualified Dividends & Long Term Capital Gains: NA
Rental Income, Actual Expenses, and Depreciation: NA
Adjusted Gross Income: $4,446.43/month after taxes and 401k deduction
Taxes (monthly):
Federal: $150.67
State/Local: $220.07
Social Security: $362.94
Medicare: $84.19
Current expenses (this is from last month, need more data):
Rent: $1,700
Utilities: $180 (Gas, Electric, Water/Sewer)
Car Insurance: $50
Internet: $35
Cell phones: $45
Groceries/household goods: $500
Netflix: $11
Fuel/Tolls: $120
Medical (pharmacy, urgent care): $75
Misc: $500 (car maint., clothes, restaurants, etc.)
Balance Transfer Credit Card: $293
Credit Union Loans #1: $242
Credit Union Loans #2: $99
Student Loan: $127.48
Best Buy Credit Card: $27
Total: $3,762.48
Expected ER expenses: NA
Assets:
My ROTH: $8,468.46
Wife’s ROTH: $55,966.28
My IRA: $15,554.97
Wife’s IRA: $49,043.22
Work 401k: $17,796.26
One Car: paid off and worth ~$12,000
Emergency fund: $6,495.98 in savings account
Total: $165,325.17
Liabilities:
Balance Transfer Credit Card: $9,781.85 @ 0% for 12 months (12/2017)
Credit Union Loans #1: $12,235.78 @ %3.5
Credit Union Loans #2: $1,771.79 @ %6.99
Student Loans: $7,478.50 @ %3.28
Best Buy Credit Card: $1,087.73 @ 0% (18 month no interest promotion on washer/dryer purchase)
Total: $32.355.65
New Specific Question(s):
How should we be prioritizing saving for retirement vs. a house vs. college?
Our rent is currently $1,700/mo and according to the NYT rent vs. buy calculator, a $500,000 home price would cost the same as renting over the next 10 years. There are certainly 3br/1ba homes for sale in my area that are significantly cheaper than this (300-400k). Moreover, the market seems to be heating up as people priced out of Boston move north along the commuter line for cheaper rentals/houses. For this reason, both rent and home prices are likely keep going up.
All this is to say that it seems we should be considering a home purchase in the near future since we plan to stay put for the long term. However, I've heard saving for retirement is a pretty important thing to do and providing for the education of kiddos is something people do.
We would be first-time home buyers and aren't familiar with what incentives there are in Mass for folks in our situation. As for savings, you can see our current assets are mostly tied up in retirement accounts so we would be starting effectively from $0. Saving for a 20% down payment on a $400k house starting now at our current savings rate would take a few years and that's without contributing anything to our IRAs or to college savings. I'm aware that I could withdraw some of the principal from our ROTH accounts and I think my 401k allows for a one time loan for a first time home purchase (my naive sense is that these wouldn't be good choices, but I'm often wrong).