Life Situation = Me - 33 years old, self-employed accountant; wife - 32 years old, helps PT with our biz and takes care of our boys; two sons - 6 & 3 years old. We file a MFJ tax return, and our only source of income is my business. The biz files as an S-Corp, and we will both receive salaries in 2019 (previous years just me). If interested, you can read a little more in depth about our background/situation here:
https://forum.mrmoneymustache.com/journals/fire-pursuit-after-health-issues/Gross Salary = $48K W-2 me, $21K W-2 wife, $26Kish pass through income from business. Total net from biz stuff about $95K.
Retirement Contributions Moving Forward = $19K pre-tax 401K for me, $19K pre-tax 401K for wife, $12,000 tIRA, and company match of 6% = $4,140. So total pre-tax savings each year = $54,140
Adjusted Gross Income = $45,000
Taxes - FICA withheld from paychecks. 0% federal income tax bracket (technically negative with EIC and CTC). State will owe around $800 each year that I will pay at time of filing return.
As mentioned above, no other forms of income.
Net Monthly Income (Cashflow) = $2,144 from paychecks. The rest I just take as a distribution and transfer to my personal checking. The last couple of months that has been $1K/month.
Current Expenses:Mortgage Payment (PITI) - $1,071
Health Insurance - $180 (heavily subsidized due APTC and kids on state insurance)
Car Insurance & Umbrella Policy - $98
Personal Prop Taxes - $50 (just save this each month for end of year)
Term Life Ins - me - $68
Term Life Ins - wife - $19
Adobe Lightroom - $10
Sling TV - $20
Netflix - $11
Utilities - $300 (usually less than this, but this is what we budget)
Food, HH, Misc, Gas, and other spending - $1,000 (I know this isn't broken down very well, but we just budget $1K and try our best not to go over).
Amazon Prime - $10
Medical Debt (0%) - $169
Total Monthly Expenses = $3,006 - This has been pretty accurate the last few months
AssetsHome Value - $180,000
Fishing Boat - $13,000
Honda Odyssey - $7,000
Honda Pilot - $7,000
Business Valuation - $150,000
401K Balances - $35,000 (just started saving last year)
Raw Land/Acreage - $45,000
Total Assets = $437,000
LiabilitiesHouse - $154,000 (4.25% 30 yr fixed)
Medical Debt - $7,400 (0% from surgery a few years ago)
Business and Personal Debt to relative - $105,600 (mostly at 5%, some at 0% - you can read the journal for more info, but I won't be providing a lot more details as family member wouldn't be comfortable - long story short, they really helped me us out when we almost lost everything due to illness -> surgery -> very slow recovery) - This loan is paid out of business account and considered an expense, so it doesn't show up in the personal expenses above.
Total Liabilities = $267,000
Specific Questions/Points to Consider:1. Do you see any areas in our monthly budget that could be reduced? I am considering cancelling my wife's life insurance, but I feel like at $19/month it wouldn't really matter. I feel we need to get better at the $1,000 catch all category as well.
2. I am now working from home full time, and we are pretty confident we aren't having more kids, so we will be downsizing from two cars to one and will be getting something more fuel efficient instead of an SUV and van (probably a Camry or Prius). That should help with insurance & gas as well.
3. I am selling the boat. My parents actually purchased a lake house soon after I bought it, so we can go use their boats to fish and play anytime we want, plus stay for free. Pretty confident I can get at minimum $13K for it. I want to use excess funds from the car sales and boat sale to beef up our emergency funds. I usually keep about $5K extra in my business checking account, but that doesn't feel like enough.
4. I will be selling the raw land as well. Will use those proceeds to pay down the loan from the family member. We had planned on building a small house on the acreage, but that just doesn't seem feasible at this point in life. No point to have a slowly appreciating asset just sitting there.
5. Due to heavily subsidized insurances, I can't afford to make any more money. I know that sounds crazy, but this level of income should allow us to achieve our dreams without working too hard. I have some real health issues/problems, so working about 30 hours a week is all I can muster at the moment, so it seems like the best plan moving forward is to keep a careful eye on expenses & income.
6. Based on some calculations, it looks like I should be FI in 15 years or so. That is a very conservative estimate based on current spending/saving patterns. That is about the time our youngest will be old enough to make his own way in life, so we are thinking the timing should work out perfectly.
7. I have all my eggs in the ACA basket, and health wise we couldn't afford to keep going if that gets screwed up. This is my biggest worry/fear. I could always return to a job with great benefits, but that would be very difficult to do at this point in life.
Thanks for reading. Looking forward to your suggestions for improvement!