Hey everyone. I’ve been wanting to post my own case study for a while now, just to get some perspective on it, see where we can improve, get another set of eyes on it, the usual.
We are a one-income household (my spouse is a stay at home parent) in the southern US. We also have two young kids and a dog. I'd like to increase our savings rate while also maximizing our tax savings for this year.
Monthly Income:
My salary = $6431
Military Benefits = $517
Rental Income = $1150
TOTAL = $8098
Monthly Expenses:
Mortgage + HOA fees on our house = $1107
Mortgage + HOA fees on rental house = $950
Internet = $80
Security System = $45
Electric Bill = $200 (monthly average)
Water and Sewer Bills = $120 (monthly average)
Trash = $16
Cell Phones = $17
Netflix/Plex = $15
Auto Insurance = $196
Gas = $200
Health Insurance Premiums = $302
Preschool = $160
Gymnastics = $50
Fun Money for spouse and me = $200
Misc Expenses = $150
Groceries/Diapers = $470
Restaurants/Entertainment = $200
Pet care costs = $100
TOTAL = $4568
Monthly Investments/Savings:
HSA contributions = $400
Car Maintenance = $75
Kid #1 College Fund = $300
Kid #2 College Fund = $300
Vehicle Taxes = $100
Christmas = $50
401K = $1138
Rental Savings = $200
Home Improvements = $200
Vacation Fund = $50
TOTAL = $2813
If you add up the numbers, you’ll notice that we have more leftover that’s not accounted for. Right now we are putting that into growing our emergency fund to 6 months worth of expenses, and after that’s complete it will go into maxing out my 401K and potentially IRAs for both of us.
Investment Account/Asset Information:
My work 401K = $14,650
Old work 401K rolled into IRA = $35,463
Roth IRA = $5,745
HSA = $5,745
Misc. checking and savings accounts = $47,600
Our Home Value = $284,000 ($180,500 left on mortgage)
Rental Home Value = $129,000 ($99,300 left on mortgage)
I realize we have way too much sitting in cash, though some of those accounts are funded throughout the year so that when annual expenses come up (vehicle taxes, termite bonds, holiday expenses, etc.) we already have the money set aside. Our emergency fund and kid’s college funds make the up the majority of the cash, so I really need to figure out a better option for holding those.
OK, I think that’s everything. The biggest thing I am looking for is advice on what you think we might be able to cut out expense wise (I keep trying to figure out where I can cull more, but we’ve knocked out so many things that I’m stuck now) and best options for storing our e-fund and college funds. I’d like to be able to max out 401Ks and IRAs this year, with extra going into index funds.
Please give me all of your wonderful Mustachian advice – good or bad – I can take it :)