Hello MMM community! I've been reading the forums for a while, and am finally ready to get some real advice from all the amazing folks here. I can't wait to hear what you all recommend!
Background:
DINK – live in the highest COL possible, and we both commute to different colleges.
Me, 35 working on PhD,
DH, 32 working on MA
Our income has been highly variable in the last two years since we’ve both been getting through school. Info below includes what we will be making this year, rather than an average of past years. Our original goal was to break even upon completion of grad school, and we are well on our way to do that and then some, so I figured maybe we could start thinking about saving and investing more, since we have areas we could trim and goals to aim for after school is done.
Long term goals: Finishing our respective school programs has been a major bucket-list endeavor, and should be complete in 1.5 years if all goes well, 2 years if things take longer than planned. Once we graduate, our plan is to both get higher paying jobs (aiming to both get jobs in the $100k range, and this should be reasonable based on the current job market in our fields) and to move into a van or cabover camper and save 90% of our paychecks. This is admittedly mostly to see if we can do it and for the adventure rather than for the savings, but we hope to quickly build up our real estate, investment portfolios, and other passive incomes so that we can do some world travel a-la Arebelspy.
Budget:
Fixed Monthly Expenses
Rent: 1550
Power: 30 (monthly average, never goes higher than 40, sometimes as low as 25)
Phones: 23 (two republic wireless phones…thanks for this tip, MMM community!!)
Internet: 60 (cheapest rate we could get)
Car Insurance: 92 (covers two cars and two drivers)
Dog Food: 100 (rescues aged 9 and 10. Adopted when they were each 1 year old)
Laundry: 30
Gym: 90 (for two people; not non-negotiable, but something we get much value out of)
Variable Monthly Expenses
Food: 400 (highly variable based on how careful we are; has ranged from 700 to 200)
Gas/Commute: 320 (we’ve done the math many times, the lower rent we pay is worth the commute compared to what we would find closer to our schools, although we would always revisit this if it became worth it. We just haven’t found any other option).
Clothes: 40
Misc: 100 (again, highly variable, but last year’s average was right at 100)
Total: 2835
Projected Future School Expenses
Me: 850 in fees for 3 more semesters (2550)
DH: 4344 for 4 more semesters (17,376)
Total: 19,926
Liabilities/debts:
None.
Net Income (after health insurance):
Me: 3600 monthly (57,600 I get paid 8 months out of the year, potential for summer income)
DH: 3200 monthly
Right now, we live on DH’s paycheck, have a little left over, and put all my paycheck into the money market to pay for school fees.
Assets for short-term goals:
Money Market Account: $3,400 (all my paychecks go here, and we use this to pay school fees and as an emergency fund. Low balance now due to new semester, just paid fees, and because of a $2,000 dog vet emergency)
2011 Honda CRZ valued at $5,000
2005 Chevy Silverado valued at $3,500 (we don’t really consider these as assets, though, since we plan to keep them until they no longer run. Chevy sits in the driveway until we need to move big shit, and we just use the Honda and public transit for commuting to and from work/school).
Total: 3400, Needed: 19,926 (will be saved with my paychecks in 5.5 months)
Assets for medium term goals:
CD from high school: $1,630 @ 1.01%, matures 11/17 (serves as back-up emergency fund)
Savings Bonds from when I was little: maybe 500? (need to be moved into something else)
Total: ~$2000
Assets for old age:
Teacher’s retirement pension: $39,388 accrued acct balance (best I can tell) Not sure how to consider this as an asset. I have 9 years of time vested in this, but retired from teaching to do grad school full time. The convoluted algorithm used to calculate benefits is super confusing.
Crappy 403B annuities (two separate accounts): $13,084 and $12,030 (these were indexed annuities I started contributing to when I was 27 and stopped contributing to when I was 30)
Fidelity 401K account: $779 (gives me the option to cash out, roll over, or do something else with it in the next few months, since it is below the minimum)
Total: ~$65,281
The Questions:
1. What should we do about consolidating my “old age” assets? I hate those annuities. Should I try to roll them over into something else now that I quit teaching? Should I leave them alone? How do I consider the pension in the net worth?
2. Any advice on what we should be doing with the leftovers of DH’s paycheck? If we are careful, we can eek out about 100-200 extra a month from that. Shift it to the MM account or contribute to 401K or other…maybe a roth IRA?
3. Where should the savings bonds and CD go? I’ve had these funds forever, and they make almost nothing in interest, so there has to be something better I could be doing with them.
4. By February of next year, we will have saved enough to cover the rest of our school fees for the next two years. After that point, what suggestions are there for investing the rest of the money? Ideally, those paychecks would go toward a down payment on some real estate we can eventually rent out.
*Side note, our future plans do not include having kids. We intend to be DINK until FIRE and beyond :)
Thanks in advance!!
