First off, I'm so glad I discovered this site, it's opening my eyes to things I'd never even considered before. Thank you for all you guys do, and I look forward to cooperating on these forums for a long time to come :)
OK, on to my case:
Life Situation: Single, no dependents, 32 year old male
Gross Salary/Wages: $77,500 - $6,456.34/mo
Individual amounts of each Pre-tax deductions - $50/mo to my HSA, $75.20/mo to health insurance
Rental Income: I rent out a room in my house for $700/mo
Adjusted Gross Income: $7,031.14
Taxes: Federal: $901.50/mo, Social Security: $392.66/mo, Medicare: $91.82/mo
Total Net Income: $5,647.16
Current expenses: I started tracking my spending mid last year using Mint, but didn't start getting serious about budgeting and saving until February. Therefore I'm going to post my tracked spending since I've been focusing on it (I spent over $1,000 in January on dining out, it was eye opening to say the least), with a few notes:
Mortgage: $307.17 principal + $727.85 interest + $147.50 PMI = $1,182.52/mo
House Tax and Insurance: $78.83 Insurance + $109.11 Tax = $187.94/mo
Total Home = $1,370.46
Utilities (Heat, Water, TV, Electric, Internet): ~$310/mo
Car Lease: $209/mo (Lease ends next July)
Car Insurance: $115.50/mo
Gym: $44/mo
Debts: $1,069.59/mo (Explained further below)
Dining Out/Alcohol: $232.12
Groceries: $215.17 (I included pet supplies in this)
Transportation (Gas): $60
Travel: This is hard to quantify. I just started budgeting and have a few trips planned this year.
One of the trips is to London and between everything I'm budgeting ~$3,000 for the 4 trips total. This strikes me as "punch in the face" material, but it's an unusual travel year for me, I've never been to Europe, and a group of friends are going so I don't want to miss it. I'm going to do my absolute best to make it as cheap as possible though!UPDATE: We've decided to postpone the London trip, 2 of my trips will actually net me a profit, and the third will cost me about $350 total, so this is much less of a concern for me now!
Disability Insurance: $85.08/mo (Through Northwestern, coverage would pay $3,599/mo)
Misc: $220 (this included a new tire this month to replace a flat)
Total Expenses: $3,930.92
Assets:
Roth IRA: $19,704.13 - This is currently through Northwestern, although I'm learning I should probably move this.
SIMPLE IRA: $2,529.35 - This is from a previous job and is through Fidelity. I haven't contributed to this in years (Full disclosure, I just re-discovered that this exists after stumbling on this blog and starting to dig - embarrassing!)
House: According to Zillow, my home is worth $240,000. However, I bought it last July for $217,500 so I doubt this figure's accuracy.
Total Assets: $262,233.48
Liabilities:
Bank loan: $1,907 balance @ 8.74% - This should be paid off this month when I get my tax return
Credit Card - $5,570 balance @ 0% - I did a free balance transfer for this debt and am paying $550/mo to pay it down when that rate expires in December
Mortgage - $211,431.79 balance @ 4.125%
Student Loans - $46,506 @ 4.37%
Total Liabilities: $265,414.79
Specific Question(s): So obviously this is only based on a monthly basis, and yearly expenses may sneak up on me that I haven't considered. But since I'm just getting started, this is the best I can do at the moment, and I mostly wanted to go through this as an exercise for myself and to get myself on the right track.
That said, feel free to bring on the face punches if there's something obvious I'm missing! Based on what I've read so far, and the information I found in this investment order thread:
https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153, here is what I THINK I should do. Let me know if I'm understanding correctly please :)
Plan of action:
- Pay off my Bank Loan with my tax return as planned. Put that fire out!
- Move my ROTH IRA off of Northwestern and onto Fidelity with my other IRA
- Start saving up more of an Emergency Fund. I currently keep this in a basic savings account. Should I store this elsewhere?
- Save up about $5,000 to purchase a used car in July when my lease expires
- Consider postponing/canceling the London trip: Update: Postponed!
- Pay off my PMI ASAP
After those two funds are set up, I'm not entirely sure the best course of action. Following the Investment order thread, my company doesn't offer a 401k (downside of working at a small company, but I love my job), I don't have any other debts with >8% interest, so the next step is maxing out my HSA.
My first inclination was to pay down my mortgage to 80% so I could remove the $147.50/mo PMI payment, or perhaps pay down my student loans, but maybe those amounts are low enough that it makes more sense to max the HSA/IRAs first?