Life Situation: Married jointly - I’m 31, my wife is 29 and we have three kids (8,4,1. I’m a teacher and she is going back to be college to be a Dental Hygenist. She is also a permanent resident who applied for citizenship. We live in Texas (no income tax, but wicked high Property Tax).
Gross Salary/Wages: $4800
Individual amounts of each Pre-tax deductions:
HSA: $283
Health, Vision, Dental Insurance: $370. Children are on CHIP
Teacher Retirement and Retirement HealthCare: $401
Qualified Dividends & Long Term Capital Gains:Dividends $60 in Roth IRA
Also from October 2017 to May 2018, I’ll be receiving an inheritance in monthly payments of $1000 a month
Adjusted Gross Income:$3740
Taxes: Federal, state/local, and FICA. 0. Typically I receive a refund of about $3000 a year
Medicare: $82
Current expenses:
Mortgage: $648 (was 30 year FHA for 3.625% and 3.5% down taken out in May 2014)
Home Insurance: $130
Property Tax: $360
Electricity: $150 (It typically only gets that high in the Summer. Normally it’s about $80).
Water & Trash: $90
Two Cell Services (includes unlimited international calls for spouse): $55
Groceries: $570 (includes household items)
House Repairs: $30
Gas and Repairs: $250
Car Insurance ($44)
Medical OTC: $40
YMCA Membership: $35
Clothes: $45
Netflix and Amazon Prime: $15
Entertainment:$60
Total: $2500
Expected ER expenses:I do get a pension at 80% of my salary when I turn 59 ½ or I can take early retirement at 51 and 65% and receive5% more each year. With rate of inflation, I guessimate my ending salary to be anywhere between $75000-90,000. I do not receive SS.
Assets:
Dodge Journey: $12,000
Kids 529. - $500
Vanguard Roth IRA: $6000
I Bonds - $300
Savings Account - $3600
HSA: $2600
Liabilities:
Car: $288 (2014 Dodge Journey purchased in May 2017 for 36 month loan at 2.2%)
Undergrad and Grad Student Loans:
$28,000 at about 5%. Right now I pay $78 a month in the Revise PAYE plan
$24,000 in Credit Card Debt. I pay the minimum which is $480 a month. For the past few years I’ve done the credit card switch a roo between five different cards:
Included are the BT rates and the limits
BOA $19,000 Limit Balance Transfer 2%
Capital One: $21,000 Limit Balance Transfer 3%
Discover: $16,000 Limit Balance Transfer 3%
Barclay: $11,000 Limit, Balance Transfer 1%
Chase: $13,000 Limit, Balance Transfer 2%
Debt Minimum: 836
Left Over: 322
Left Over
At work, I also have available a:
403 (B): Can be used as Roth, no fees
457: Can be used as Roth, 2% fees
Then I have a Roth IRA with Vanguard, average fees about .35%
Specific Question(s):
Okay, I know it’s a lot of debt. I’ll stand ready for your punches. I was young and stupid. Because I’ve always had the many options for a balance transfer for the past three years, I’ve paid it off, but always let it creep back up slowly. So, it never got bigger, but it wasn’t getting smaller either.
In the past year, I’ve also been paying down the debt since January (So you can see it’s a big higher . . . ).
Now my questions are:
1.)Should I stick to the Investment Order? In other words, pay off the CC debt first. Yes, right now it’s only 2 to 3% every 17 months, but with the Fed raising interest rates, and Murphy’s law, I may not always find myself in a position to pay it off and all of a sudden find the 0% APR dry up.
Although, I expect to be paying more tax later than now since I won’t have my tax credits aka children, should I take advantage of that no fee 403B, despite the disadvantages?
2.) What else would you cut? Before you attack YMCA, that is one of the reasons we’ve cut down our budget down so much in that I've Gone from stress eating and a terrible 265lbs to a slightly less terrible 206lbs (I’m 5’11) in the past year and half and my wife’s given up her stress shopping habit.