IRS filing: MFJ
Dad 37, Wife 36, 3 Kids (7, 5, 2) 1 dog with health issues
Monthly Salary 13,235 (this is annual / 12 in reality I'm paid almost 50% of this in December)
Pretax Health Ins. $395
Pretax Vision/Dental Ins. $63
Healthcare Flex Savings Acct. (FSA) $83
Daycare FSA $208
FICA base salary/wages $12,485
Income subject to IRS tax $12,485
ESPP/After-tax 401k (50% of 6.5%) $860
Paycheck income before tax $11,625
Schedule C net profit $392
Federal Total Income $12,877
Federal tax $1,392
State/City tax $559
Soc. Sec. $634
Self-employment Tax $55
Total income taxes $2,822
Add Health + Daycare reimb. $292
Add Commuter reimb. $0
Add Excluded Foreign Income $0
Income before other expenses $9,486
Monthly Average Expenses:
Car Maintenance, Registration, etc.$85
Gas/Oil for heating$165
Medical (Doctor, Hospital, etc.)$200
Car Loan 1$386
Car Loan 2$592
Total to invest$1,287
Available for taxable investment:$1,287
Roth 401k: 155,000
Employee Stock: 250,000
Traditional Rollover: 50,000
Auto Loan 1: $22k, 10k remaining at ~2%
Auto Loan 2: $34k, 9k remaining at 1.72%
Mortgage: $328k, $319k (29y) remaining at 4.25%
The Bottom Line:
Because a large chunk of my pay is paid at YE I end up using some of that to cover next years expenses (ie. Mortgage). We spent quite a bit of the 4th quarter and now after paying off my CC statement balances I'm finding my cash reserves significantly drained making it very difficult to get through this year, on top of this, my wife works a limited amount of hours a week but I believe this actually costs us money. She is considering leaving work, preferably before school is out, or else I'll be paying for daycare. If this is to happen I need to scrub off some monthly expense. The one expense I'm focused on is my car payment which is $600 a month. I have a few options but 2 of them I'd like to explore.
1. Pay off the remaining $8k, then refinance at current bank over 36 months. Which would reduce this down to ~$200/m and I could pay off the remaining at year end. I have the savings from my previous years bonus but I need this to cover my mortgage for the remainder of the year.
2. Use $8k of my Roth 401k to pay this off.
3. Stop contributing to 401k to pay it off faster (I currently have about 12 months left)
4. Sell vehicle, which is an option but I'm not sure if I want to explore this right now.
I'm really only considering option 1, 2, 3 right now but I do have my eye out for a lower priced used vehicle that is reliable. Everyone has their own balance of Mustachianism and I'm working my way to get there.
Some might suggest selling my house, but selling my house does not make financial sense to me right now because I would lose so much to realtor fees, but it will be in the works eventually. Also note that this isn't the only step I'm taking, as far as cleaning up wasted expenditures. Monthly expenditures are based on my previous month, which was a pretty good month, but also consider that I won't see almost half of this income until December, cash of $20,800 is what's left over from last years bonus paid in December.
Thanks in advance.