Hey Everyone!
Just started reading MMM a month or two ago and it has been really eye opening! Thanks for all of the contributors on here, I'm learning a lot (but still have so much to grasp). Appreciate you taking the time to take a look at my situation!
Life situation: DW (age 30) and I (age 32) recently got married back in April, and we will be closing on a townhouse next week (yeah, may or may not have been the best decision from a pure financial perspective, but it sets us up well for family in the coming several years, something that is very important for us). We have some things we need to pay off, but I think we have the means to do it, just need to figure out priority and how aggressively we work at it. We live in a major midwest metro area. Kids are on the horizon, probably 2 years out or so.
IRS Filing status: No idea yet. We've obviously been filing single for our entire lives, so not sure on the implications yet come tax time now that were married.
Gross Salary / Wages: Me: 120k/year salary. Her: 95k/year salary. Both of us receive yearly bonuses (that aren't going away any time soon) to the tune of 15k or so combined. In total, somewhere around 215-230k/year.
Taxes: I just found I've put in 3 exemptions on my return, so I think that skews it a bit:
Federal: me: $1512/mo Her: $1270/mo
SS: me: 560/mo Her: 459/mo
Medicare: 130 Her: 107
State: 420/mo Her: 256/mo
Retirement Funds: Me 4% (with 4% company match) Her: 10% (her employer contributes 3% regardless of what we put in).
Health Insurance: Me covered 100% by employer, Her $~250/mo for Medical/Dental/Vision PPO
Misc: I pay $100/mo pretax for my transit (I take the train to work). This is actually more than I need so I just cancelled contributions to it (I have $400 in my account right now that I need to burn through, then will start contributing like $75).
Net Pay: Me: $3014 Bi-weekly or $6530/mo. Her $2000+2450 /mo (she gets a permanent bonus on one paycheck of $750).
Total net pay: $~11,000/mo
ASSETS:
Bank accounts: $10k emergency fund, 10k in Savings for 20k total liquid assets
401k Info:
Me: 33k, Her, 10k (just started putting money in hers). Both of our websites say its divided evenly between 401k and Roth IRA...but I'm still figuring this portion out, more questions below.
We have one car with 85k miles that we should be able to get good use out of for quite some time (2010 model year). We own the car outright, paid off a few years ago. No plans to get a 2nd car any time soon.
Now onto the expenses!
New House:
Purchase Price: $492,000
Equity: $73,800 (15%)
Loan: $418,200 @ 3.99% locked for 30 years, no fees for extra payments or early pay off.
Monthly payment (including taxes and everything else): $2850
Credit Card Debt: $0
Now the kicker, Student Loans:
Me: Just paid off my final student loan payment last month, so I'm good.
Her:
1: $3280, 3.25%
2: $6000, 3.25%
3: $13,700, 8.875%
4: $9000, 3.25%
5: $14,100, 4.25%
6: $3000, 5.35%
7: $1100, 6.55%
8: $1100, 1.03%
9: $1500, 4.55%
10: $3300, 5.25%
11: $3300, 5.50%
12: $1400, 6.5%
Grand total: $60,780 @ average of 4.80%
Average monthly payment: ~$900
Day to day expenses:
Utilities: Honestly we don't know what this will be. Guessing $150 or so. We'll see once we move into our new place.
Groceries: $500 (this hurts us, need to get this down)
Restaurants/Bars/Lunch@work/etc: $750 This one I know a facepunch is coming, and something we've been working on. Our existing house (rental) has a TERRIBLE kitchen that is A. tiny and B. poorly designed. Hoping once we get something with a little more space we'll be much more keen on cooking more and eating out much, much less. We've talked about it and its a goal for us.
Fitness Membership: $75. This will probably be either going away or replaced with something cheaper soon.
Streaming Services (Spotify, Netflix, Audible): $40 (this will probably go down to $25 as I will probably cancel Audible for now).
Gas/Parking/Misc Transportation: $200 (I'm ballparking. Her family lives out of town (3hr drive) and we visit them relatively often.)
Various shopping (Here comes another facepunch): $300-500. Example of this, last month I had to buy a suit for her grandmothers funeral. This is a column that has been killing us, but is definitely trending downward. I've historically been an Amazon addict, but looking in my history, for the month of July I spent 30 bucks (on DW's coffee supply). Much less than normal, and trying to keep it that way.
Car Insurance: $100/mo
Internet: Currently $0, probably going to be ~$70 or so. Need a decent plan for my work.
So I guess what I'm looking for is, where do we go from here? My plan right now is:
1. Pay off all Student Loans. May not be the wisest from a pure dollars and cents perspective, but I hate being shackled with monthly payments, and would love to just get rid of them. If we buckle down I'm hoping we can get them all paid off by this time next year at the latest.
2. After that, Raise 401k/Roth to maximums. Maybe we should do this immediately? I also need to figure out that Roth business, because I thought I read that our incomes were too high for this, but I don't know. Could use some advise here.
3. If we get to 80% LTV, then PMI goes away, which is coming in at around $70/mo. Not sure if its worth it to throw in some extra cash to get there quickly just to get rid of it.
4. Open a taxable investment account and get to saving. My goal for FIRE is 45-50, and I think we can probably make it happen, but I'd also like to pay off house in there too. Still trying to figure out how aggressively to pay down house vs invest in the market. Seems like investing is a wiser choice, but at the same time it would be nice to have the peace of mind of very low monthly payments (just taxes + utilities + spending), especially if at some point one of us wants to leave the workforce (probably due to kids).
5. ????
Okay, I feel like that was all over the place, and I probably missed quite a few things, so please ask questions, and let me know your thoughts on how to approach this.
Thanks all!