Hello all,
I posted here four years ago seeking advice as a dual low-income earning couple. Everyone here agreed we had reeled in the spending well and the biggest hurdle was earning more money. Since then, many things have changed. I switched jobs and I’m now earning 40% more, we purchased a house in Philadelphia, paid off all student debt, and both took on second jobs. By paying additional on our mortgage principal, we recently had the PMI removed and now have 23 years left.
Our biggest challenge at the moment is deciding what to do about a car and whether to invest or payoff our house early. My car is on its last leg and taking the train or bus to work is not a possibility (when we purchased our home, I was really hoping we could both find jobs in an area that was accessible by public transport). Any advice about this would be greatly appreciated. I believe the smartest thing to do would be for my husband to find a job in the city so we could essentially be a one car family, but let me know if there could be a better approach.
Below, the numbers. Can someone take a look and advise on what our next steps should be? A New job? Decrease expenses? Continue making extra payments on the house, or invest more in Roth? Thanks!!!
Income:
My Take Home Pay: 40k
My 401k balance: 35k (will have 17,500 yearly contribution)
My Roth IRA: $0 (to be set up soon)
My Pension: 5k (cashed out of prior job)
My Stock Option: 12k (with prior job)
Husband Take Home Pay: 25k (looking for higher paying job)
Husband 401k balance: 80k (has 17,500 yearly contribution)
Husband’s Roth: 1k (just setup recently)
Husband Pension: 25k
Husband funded HSA: 15k (with 4k yearly contribution, will max next year)
Combined Take Home Pay from p/t jobs: 12k
Average Take Home/mo: $5900
Expenses:
House: (3.49% interest rate) $1,200/mo includes property taxes/homeowners insurance, bought in 2016
Cable TV/Internet: $160/mo (soon to be internet only; approx. $80/mo)
Electric: $70/mo
Natural Gas: $90/mo
Water/Sewer: $50/mo
Cell Phones: $40/mo
Spending Money: $500/mo
Food (Takeout/Restaurants): $400/mo
Food (Groceries): $250/mo
Gasoline (combined): $190/mo
Auto Insurance: $100/mo (2006 Civic & 2008 Altima – liability only)
Misc Vehicle Expenses: $175/mo (inspection/repairs etc. averaged over multiple months)
Holiday/Birthdays: $115/mo
Vacation: $150 (averaged over multiple months)
Clothing: $120
Haircuts: $50/mo (I cut my husband’s hair myself)
Average/mo: $3,580