So, together here is your bi-weekly base pay:
Couple’s bi-weekly base pay:
Gross pay = $2968
Pension contributions = $343
Taxes = $330
Healthcare/Vision = $138
Union dues = $41
Deferred comp (457b) = $100
Net pay is roughly $2050 bi-weekly, also give or take.
To SIMPLIFY, I am going to assume you will get $4100 every month, even though you’ll have 3 paycheck months every once in a while, plus overtime, plus whatever your wife brings home from her sidelines.
4100.00 = Monthly income total, approximately.
Now for the Expenses.
Mortgage = 700
Utilities (varies on seasonal use) = 270 (inc gas, electric, water, trash)
Car payment = 500 * how much do you still owe on the car? What kind of rate is your loan?
Car insurance = 120 * have you shopped for insurance recently to see if you could lower this?
Car fuel = 200
Cell phones = 90
Internet = 70
Groceries = 300 * Shop sales. Cook more meatless meals. Pack lunches. If you look at your grocery cart and it is full of convenience, prepared foods, ask yourself if that's really how you want to eat. It's expensive. Buy ingredients...raw food that you cook. It's better for you and cheaper.
Student loans = 150
Gym membership = 60
Pet supplies = 120 * I have beloved dogs, so I get spending on pets. Have you done what you can to keep this low?
Home supplies = 200
Dining out = 150 (historically; has cut down to about 50 recently) * Until you pay those CC off, I’d cap this at $75 and put the extra $75 towards CC. A little sacrifice now will pay off big later. At a time in my life when I was making $18,000 a year and barely getting by in the big city, my HUGE treat of the week was going to Burger King and having a Whopper Meal, after my Saturday trip to the library. I would sit in BK, reading a good book, washing down my burger and delicious fries with a frosty Diet Coke, feeling like I was living the good life. That was over 20 years ago, and I can treat myself to nicer things now. I don’t think I always enjoy them as much as that weekly trip to BK, because back then it was rare, special, and I savored it.
Personal Allowances = 200 (100 for each of us)
Personal hygiene = 50
Health care stuff = 60
Clothes = 50 (should probably come out of the allowance of the person who bought it) * Do you really need to buy new clothes every month?
Total approximate expenses = 3290
Total money left over = 710
Those figures assume we don't have any splurges or unexpected spending. The extra money has been going on the credit card steadily since we combined our money.
Now for Assets and Debts:
Assets:
Emergency Savings = 2100
Deferred comp = 0. We just started the account so it should go up by 200 every month. Plus or minus the capital gains/losses.
2007 Chevy Cobalt = paid off * Wait, what? How do you have TWO paid off cars while you are paying a $500 per month car payment? What gives?
1993 Dodge Dynasty = paid off
Wife also has some ATT stock which pays about $16 a year in dividends that her grandpa bought for her a long time ago. Not sure of the actual share count or amount.
Debts:
Truck loan = 19500 @ 4.5%. Have about 3 years left of payments. Truck valued at 25000 currently.
Student loans = 8000 @ 5.5%
Credit card = 10800 @ 6.75%
Mortgage = 85000 @ 4.00%. House appraised at 130000. Does need about 15-20k in updates to realistically fetch that price. Was advised a fair price for it now would be about 100k as it sits.
Basically that's all I can think of at the moment. If you want any further details just ask and I'll provide.
I know the first things most of you will notice is the truck note and the credit card. We use the truck weekly for house projects, yard work, etc. It is also our main travel vehicle since it is the nicest and roomiest vehicle we have. I plan on keeping it until it dies, hopefully a long time into the future. I daily drive the Dodge back and forth to work. But it is literally a beater and may blow up next week or next year. It was basically free for us so I'm gonna use it while we can. * Sigh. I am from the South and know how men can be about their trucks. Tell me truly, do you use this thing as a TRUCK/HAULER or do you have it because “a man needs a truck” (quote from my father, a man with a truck)? If you are using it as a car (driving to work, driving to the grocery store) then you do not really need a truck, I don’t care what my Dad says. You could sell it, pay off the loan, and use the balance to knock off some CC debt. Or sell it, sell your crummy car, and buy a 3-5 year old truck with cash.
I have this 8 year old Honda Fit, and you would not BELIEVE the amount of stuff I can get in it. It’s like the Tardis, bigger on the inside! Not that I think a Fit is perfect for everyone, but I do think owing almost $20,000 on a depreciating asset is…not good.
The credit card has a large balance because we merged both of our personal cards into one account. We also financed a good deal of our wedding and honeymoon with it. Also has a few college classes I took on it as well, since the interest was comparable to a new student loan. We've knocked over 3000 off of it since last November and plan to keep at it.
* I would hit that CC with everything I had. If you are paying anything extra on the mortgage, stop that, and add the cash to the CC. And stop using the CC until you pay it off! If you are carrying a balance, you can’t use the card. It’s a rule.
Our goals are to knock down the credit card and student loans.
The first goal, paying off CC and Student Loans, great goal. Go for it. While you are doing that, I would NOT spend any money fixing/updating the house, unless you are doing something to stop the house from going down in value. So, a new roof to stop water damage would be okay. A new kitchen because the old one is ugly right now, not so much! Any cash money you spend on the house is money you are not using to retire debt.
THEN we want to boost our retirement income by investing more into the deferred comp and other investments.
As soon as you are out of debt, you need to boost your savings and investing immediately. Then re-work the house with what you have left. Time is on your side with retirement and investment savings; do it now while you are young, and you don’t have to save as much each month to wind up with the big bucks at retirement.
FINALLY - Then we want to update the house so we can sell it.
Children are also on the horizon in the next 1-2 years. We plan to retire at 52 (youngest age to retire and still get full pension) and work for ourselves. We obviously need a kick in the butt to get there!
Well, have a look and let me know what you think we can improve on. Thanks in advance!