Hi there!
After reading messages on the forum for a while, I'm now ready to post. I've been shy about sharing our situation as I'm a little nervous about getting face-punched :) . Time to be brave! Plus, I've found you guys to be super supportive and full of helpful advice.
So we're not really looking to retire early, more to retire securely at a reasonable age (like not above 70). We have some debt and a recent mortgage that seems unsurmountable to me. I'd like your input on how we spend our money and whether we could/should do things differently.
I'm 28, husband is 30. I stay home with two young kids (1 and 3). After taxes, insurances, retirement contribution, etc, husband takes home 5,200 monthly.
Our debts:
- Student Loan - remaining balance of $5,010 ($25,000 originally), interest rate 6.8%.
- Car Loan - for our Subaru that we bought brand new (I know, I know) after our 15 year old car definitely quit on us. We tried to buy used and found the prices were essentially the same as new for anything that had less than 100k miles on it (we are in a fairly rural area). Anyhow. 19k left on it, 1.9% interest rate.
- Mortgage. We owe about 212k. 4.99% interest rate.
Assets:
- I have about 10k in a retirement account from my previous job.
- Husband has about 15k (he's been in the workforce for only 18 months, was a graduate student earning a pittance before that)
- Car #1: 2016 Subaru Forester, worth about $20k per KBB- still owe $19k on it though.
- Car #2: old 80's pickup truck, worth about $1500. Not super reliable, mostly kept around for odd jobs and errands.
- Car #3: the husband's commuter car, bought to replace the increasingly unreliable pickup. '88 Volvo, probably worth around $2k?
- we have about $30k of equity in the house according to latest appraisal.
Here's our budget breakdown:
- Mortgage PITI: $1,500 (we throw in around 80 dollars extra towards the principal, just to have a round number).
- House repair fund: we set aside $250 each month in prevision of things breaking down, etc.
- Electricity: $100
- Heat: We budget $150 each month. It's more than enough to fill the propane tank once a year (500 gallons a year) and buying wood (4 to 5 cords).
- Trash: $25
- Internet: $60
- Phone: $120. We are on Verizon (not on contract) because that is unfortunately the only network with any sort of coverage around here. We often rack up extra data usage due to my husband's job. If you have any ideas about how to cut that...
- Gas: $200. 30 mile commute for my husband, a "trip to town" is 12 miles.
- Tithing: $400.
- Student loan: $750. I think the minimum payment is something like $200.
- Car payment: $360.
- Car fund: $250 every month to cover insurance, registrations, oil and parts, and save for the next beater :)
- Savings: $250. We'd like to build up a beefy emergency fund, because of the nature of my husband's job and also because all of my family is overseas (and I might have to rush there one day). Once we get there we will likely funnel that to extra retirement savings or kids college.
- Groceries, household, etc: $750. That's the money I "manage" every month. Between diapers, co-pays, food, and cat litter I can't seem to be able to save any of it. I try to not go over $300 for food, but I really struggle (and I bake my own bread, shop sales, eat very little meat and grow a garden...). So any suggestions there would be very appreciated!
Any suggestions on how to do this better? I don't see where to trim, but you might!
I've been trying to bring in a few extra dollars working from home but without real success. My husband can't really pick up a side gig as his job pretty much takes all the time he can give to it.
I realize -as I'm typing this post- that there is nothing dire about our situation, yet it feels like there's not much extra room and like we are not paying debt down fast enough. Any ideas?