Life Situation:
Married filing jointly, 28H and 26W DINK’s in Mississippi. No debt other than student loans.
Gross Salary/Wages:
Wife just started a new job at $45,000.
Husband works part time in ER Trauma and full time school. Limited to 20 hrs a week PRN, so no benefits, overtime, or health insurance offered: $14,000
Total: $59,000
Pre-Tax Deductions:
At the moment we don’t have any pre-tax investment contributions. My wife will be eligible for 401k and HSA contributions that will be matched at 3% after her first year at her company, but since there was no match we did not contribute.
We did just sell a home in CO and moved to MS, so out of the funds that we have from the sale (about $50k) we maxed out our Roth’s for the year in a Betterment account.
Medical insurance: $437 (covers medical, dental, and vision)
HSA: $84
Other income, dividends, rental income, etc.:
We do not have any other income at the moment. With the amount of time I am in school and working I do still have time for a side gig or another part time job. Wife has also voiced interest in the possibility of a part time job and is doing free classes online to get more certifications for getting a raise at her current job.
Adjusted Gross Income:
$52,762
After Taxes:
$43,919
Current Expenses:
Monthly Average Expenses: Monthly Annually
Rent $1,105 $13,260
Home/Rent Insurance $15 $180
Car Insurance $96 $1,148
Car Maintenance, Registration, etc.$106 $1,272
Dining (Lunch/Dinner/Etc.) $200 $2,400
Electricity $100 $1,200
Fuel/Public Transport $150 $1,800
Groceries $500 $6,000
Internet $40 $480
Life Insurance $35 $420
Miscellaneous (Spending Money) $150 $1,800
Pets $100 $1,200
Phone (cell) $65 $780
Wife's Student Loan $248 $2,979
Husband's Student Loan $135 $1,620
Total Expense $3,645 $43,739
Available for taxable investment: $15 $180
A couple things to clarify from the spreadsheet: Electricity is the only utility we pay in our apartment. The spending money/miscellaneous category usually covers things like my wife’s haircuts, replacing broken parts on my bike, etc. It is not money that we usually just blow. Most things we do have I will repair it DIY, so $75 each would repair about everything we use.
Assets:
Emergency Savings/Home Down Payment: $45,000
Wife’s IRA: $15,000
Wife’s Roth: $5,500 (2017 contribution)
Husband’s Roth: $5,500 (2017 contribution)
2009 Toyota Corolla: No payments and worth around $5,000
1996 Toyota Tacoma: No payments and worth around $4,000
Total Assets: $80,000
Liabilities:
Wife’s Student Loan: $22,435.53 at 5.5%
Husband’s Student Loan $8,729.68 at 3.5%
Total Liabilities: $31,165.21
Questions:
Our biggest concern is where to allocate a chunk of our $45,000 in savings. We have just moved and committed to living where we are for somewhere around 10 years at least. Renting in our area is really high in comparison to buying. It is a LCOL area, so we could get a home comparable to our apartment in the $150k range with PITI less than $900. That would take $30k and leave $15k in our emergency savings for unknown repairs on the house or if we lost a job. That amount left could cover us for 6 months if we both lost our jobs. I am very handy and have the ability to completely remodel and repair what would be necessary minus a few things (foundation repairs, etc.). We currently have two 60lb dogs in a small apartment, but there is no chance of my wife parting with the dogs. Some of you understand that, some of you won’t.
We are not uncomfortable with the student loan amount we have currently, but willing to consider all options and face punches for having them. I am also in school full time in an accelerated BSN program to be an RN. We will have $70k total in loans by the end, but I already have a job guaranteed at the place I work when I finish school and will be making around $60-70k, which is about the average for nursing with some experience in the field. Our plan would be to pay off all the remaining student loans within a year of finishing school so that we could contribute 50% or more toward savings.
Just for what it is worth, my wife is uncomfortable in the apartment here. She grew up in split family with both sides being on the top 1% of income earners, so she is not used to shared spaces, noise, no yard, etc. I, on the other hand, grew up at poverty level my entire life and have lived in small apartments almost the entire time, so I could stay here if it was the best idea. I am trying to find a compromise if buying a home is a bad idea.
Any help would be appreciated and I am an open book, so please drill me!