Life Situation: Young couple (26 & 27), MFJ, living in MO, 2 children (7yo and 1yo), currently living on one income while husband goes to school. Several things may be changing since I am almost out of the probationary period in my new job. We are currently aided by family and government assistance but I’m trying to work us into financial security so we don’t have to rely on these things. I AM NOT WILLING TO TAKE ON A SECOND JOB. I already work 40 hours a week, and I do not want to sacrifice my time with my family. My nights and weekends are sacred to me. That being said, if you know of any (non-MLM) ways of making extra money that are legit, please feel free to suggest. Husband takes classes all day until 3 pm when he gets our son off the bus, in order to save on after-school care. I get home around 5:30 pm.
Gross Salary/Wages: Monthly: $2,716
Individual amounts of each Pre-tax deductions:
Health/Vision Insurance: $415
Dental Insurance: $42
FSA: $40
403(b): $109 (Employer matches at 4%)
MOST 529 college account (total for both kids, separate accounts): $60
TOTAL PRE-TAX: $666
Other Ordinary Income: My husband gets leftover money from his Pell Grant, but we aren’t guaranteed this amount. He wants to also take out student loans for our living expenses but I said no.
Taxes: $174 (totaled and rounded up to the nearest dollar amount)
Adjusted Gross Income: $1,876
Current expenses:
Rent: $700
Internet: $51
Electricity: $122 (budget billing plan, our bill changes too much to pay monthly usage)
Water/Trash/Sewer: $70
Daycare: $410 (will be reduced in November, starting with new provider)
Cell Phone Bill: $90
Groceries: $100 (currently in SNAP also)
Haircuts: $30
Discover Card: $65
Chase Card: $30
JCPenney Card: $30 (Almost paid off!)
Hospital Bill: $50 (still trying to pay off having a baby)
College: $50 (leftover balance from when my youngest was going to daycare on campus)
Loan Payment: $93
Netflix: $13 (for the kids, shared account with my parents-in-law as “payment” for them taking care of our renter’s insurance and husband’s car insurance)
Car Maintenance: $30
TOTAL EXPENSES: $1,851
**Two of my three cards are maxxed out from when my husband lost his job and we had to use them to pay bills until he could find something else. I’m unable to cut down on gas costs due to lots of city driving for my job and I drop our daughter off at daycare in the morning. We live too far from campus for husband to walk but his car gets good city mileage (and he doesn’t drive it otherwise) so we only have to fill it up once every month and a half.
Assets: My bank accounts are embarrassingly low so I won’t share. My parents own my car. My only assets are my charming smile and empathetic nature.
Liabilities:
Personal Loan (used for moving to where my job/husband’s school is to cut down on commuting costs and to cover first two weeks of daycare costs while waiting for paycheck)
Original Principal: $2,000
Interest: 5.750%
Minimum Payment: $93
Months until Paid Off: 21
Current Principal: $1,842
**I also have $15,500 in student loans that are currently in forbearance on an Income-Based Repayment Plan. My goal is to get rid of my credit card debt, then tackle the student loan monster. Since I work for a non-profit, I intend to apply for loan forgiveness after 10 years in the field.
Specific Question(s): I need a few things answered, just because I’m still not good at this adulting thing, and I’m being confused by Internet searches.
1. How can I insert emergency fund savings into my expenses (like how much should I look to save based on my current expenses)?
2. Would consolidating my credit card payments help my monthly expense situation? All my cards are frozen so no additional expenses can be accrued. Currently, we are working on a hybrid snowball/avalanche method of pay off where we’re focusing on the smallest debts first, then once those are paid off, doing giant payments for the highest interest card and ending with the lowest interest rate card, if that makes sense. I also have no idea what debt consolidation would do to my (low-ish) credit score.
3. Should I reduce my 403(b) withholding to less than 4% until I start making more/am more financially secure? I’m not looking to RE at all.
4. We also want to start saving up a down payment for a home, since renting has not been great, but this will be in about 5 years or so, once my husband gets placed at a school (he’s studying for a teaching degree). In addition to saving our tax returns, how much should we look at setting aside while he’s in school, based on our current financial situation?
Comments: I just need advice from people who actually know what they’re talking about instead of random Internet searches and family members who haven’t been in this sort of situation before. I’m lost and trying to figure this out because I feel like a bum having to rely on family and not being able to take care of everything myself. I appreciate you taking the time to read this!