Not sure if we have lost motivation or are on auto-pilot now--thank you for any advice you may have! Longtime lurker posting for the first time. :)
Life Situation: 31, married filing jointly, would like to have a kid soon. We live in Seattle—I’m a social worker and my husband works in tech. A few big changes within the last year: We bought our first home in March and my husband’s income doubled in September when he started a new job.
We are not super interested in early retirement as we both love our careers (but who knows, we may change our minds!) but have come to really value the FI community for it’s values—what is worth spending money on and what isn’t? It’s different for each person and we are beginning to hone in on what things truly spark joy. For example, I used to spend thousands of dollars each year on clothing. This has almost been eliminated from our budget, but we do have season tickets to the Sounders because we love going to every game. The downside is that we don’t have clearly defined goals. We were on a roll when we were saving up for a home down payment but now it kind of feels like we are saving just to be saving. Not as exciting and harder to stick to…
Gross Salary/Wages: Me $64k
Husband $105k (likely $15-20k annual bonus but haven’t seen it and we do not factor it in to our plans)
Pre-tax deductions: We both maxed out our 401ks and IRAs last year (My employer matches 4% and husband’s matches 50%). Both of our employers pay all insurance premiums and husbands puts $2,000/year in an HSA to cover any out of pocket health expenses. We have not contributed any extra funds to husband’s HSA, which is something we have considered.
Expenses:
Mortgage- P&I, taxes, & home insurance (4.25%): $2475
Entertainment (non dining): $200 (We have Sounders tickets, go to a few concerts and musicals each year)
Personal Care: $50
Groceries: $400
Dining Out: $250
Lunches Out, Breweries: $100
Coffee: $20
Misc/Shopping: $50
Charity: $500 (We feel strongly about this)
Internet: $45
Cell phone: $125
Utilities: $100
Gas: $125
Auto Insurance: $65
Travel: $40 (This only includes weekend trips, we do 1 international trip about every other year and we save money up in a separate fund to cover those expenses)
Gifts: $30
Gym/Fitness: $75
Prescriptions: $50
TOTAL EXPENSES: $4700
Assets:
Checking/Savings: $15,000
Taxable Brokerage: $53,000
401ks: $150,000
Trad. IRAs: $16,000
Primary Residence: $530,000
2013 Honda Fit: $6,000
Total: $770,000
Liabilities:
Mortgage: $408,000 at a rate of 4.25%
Total: $408,000
Savings Plan: We don’t have a very strategic plan at this point—I feel like we’re just trying to get our numbers up. My inclination is to try and invest as much as possible in our index funds (after maxing 401k and IRAs).
Specific Question(s):
1. We have the option to purchase my husband’s employer’s stock (a large tech company) at a discounted rate. I love index funds and the idea of buying a single stock scares me, but at a discounted rate is it a good idea? I believe it is 10% off.
2. Our 401ks and IRAs are currently both Target Retirement Funds. 401ks are through Fidelity and IRAs are with Vanguard. Should we start investing IRA funds in something more aggressive?
3. I really hate our mortgage cost and still feel bad about our home purchase in general. I am glad to not have to worry about rent costs going up but at this point we are still paying well above what we were paying for rent (We were paying $1500 and are now paying $2500 total housing cost.) We bought at the top of the market and our house hasn’t really appreciated at all, bought for $527,000 and Zillow now says $530,000. Not sure what my question is. ☺ Our house is way too small (in my opinion) to take on renters--850 square feet.
Like other HCOL posters have shared, it’s hard to know how to feel when everything is so expensive. Oh, Seattle.
4. Any thoughts on putting money in my husband’s HSA?
5. It is possible that we will move to an extremely LCOL area in the next 5-10 years (family). Our incomes would likely decrease as well, though in the best scenario husband would keep his Seattle job and salary. We often have discussions centered around feeling like we are not enjoying everything the city has to offer (entertainment, restaurants, weekend trips) and that if we do move we will have more money than we know what to do with. There are no easy answers here…
