Life Situation: Married filing jointly, Me 34, Spouse 35, Kids 11 and 12. Washington State.
Gross Salary/Wages: Me 80k, Spouse 10k. While I get a normal monthly check, about 25% of the income is very erratic and not guaranteed. All of spouse's income is erratic, most comes in the summer. We both work for ourselves, so no benefits of any kind through work.
Other Ordinary Income: None.
Qualified Dividends & Long Term Capital Gains: None.
Rental Income, Actual Expenses, and Depreciation: None.
Adjusted Gross Income: 90k.
Taxes: FICA is a killer here, after deductions we tend to pay about 9k a year.
Current expenses:
Mortgage: P&I $1515, T&I $325 (15 years left, 215k balance)
Cable & Internet: $165
Netflix/hulu/Amazon prime: $30
Cell Phone: $154 (3 lines)
Electric: $80 average, higher in summer, lower in winter.
Water, Sewer, Garbage, irrigation etc: $100
Auto Loan: $325 (2200 left)
Natural Gas (heating): $12 in summer, ~$110 in (short) winter.
Private student loan 1: $50 ($3,100 left)
Private student loan 2: $92 ($7,100 left)
Federal student loan: $300 ($62,000 left)
Braces: $125 (0% interest, 2400 left)
Gas: $200 (I have a short commute, half of this is out of state travel to see family)
Insurance: $60
Groceries: $600
Restaurants/Fast food: $500
Gymnastics: $60
Instrument rentals : $65
kids insurance: $40
About 4,800 per month, not counting taxes.
Assets: Home worth $350,000, ROTH IRA $26,000, Vehicle $6,000.
Liabilities: Mortgage 215K, just refinanced from 30 to 15 year loan (cut off 9 years of repayment) with new apr of 3.25%. Total Student loans of about $72,000.
Specific Question(s): So I have recently refinanced the home loan to shorten its length and get a better interest rate. I also have been paying more than the minimums on the student loans, starting with the higher interest private loans (all loans are 4.25%-5%), but only by an extra 150 a month. I also made a pretty big lump sum payment middle of last year to pay off a different private loan. I put $1,000 away every month in the Roth IRA, started about 20 months ago.
The plan right now is to finish paying off the car loan in 7 months (and not immediately get a new one!), and then use the money that is freed up to pay the private student loans off faster.
1. Should I be putting so much away for retirement when I have so much debt, or should I just be paying down debt (other than low interest mortgage) and then save? I feel like stocks are high right now, so maybe
2. I know there is fat to be cut in that budget, but I am sure my spouse and kids would be upset if we cut out all restaurants and cable (Internet is mandatory for work). How do I present frugality in a way that doesn't seem like a huge lifestyle downgrade?
