Topic Title: Savings priorities: where should I save money and in what order?
Life Situation: Married, filing jointly, 2 little kids not yet in kindergarten, living in very HCOL area.
Gross Salary/Wages: ~$315,000 between our two salaries and our air bnb (granny flat).
Individual amounts of each Pre-tax deductions 401k, HSA, FSA, IRA, insurance, etc.: Maxing out 403(b) x 2 and a 457, 2K in FSA yearly, 5K in dependent care, no access to HSA, just starting to throw extra money into VTSAX in very not-systematic way.
Other Ordinary Income: already included.
Qualified Dividends & Long Term Capital Gains: only starting doing post-tax in the past 2 months... not much here.
Adjusted Gross Income: This is less relevant to my question, so I won't bore you with this math.
Moving on...
Current expenses: ~$140K/year, including disability insurance and student loan payments (on PSLF track).
Assets: About $70K in retirement accounts, $11K in VTSAX, owe $572K on an approximately $900K house (interest rate 3.65%).
Liabilities: LOTS of money in student loans (~$300K) but halfway through PSLF and pretty much have all our eggs in this basket (please no comments about this, let's all agree it's controversial and leave it at that, and we have confirmed that it will save us loads of money once it goes through). Currently in loan repayment programs as well and pay around $1K/month of our own money toward the loans, in addition to money we get from the federal gov't (we are in healthcare in public hospitals).
Also a $70K loan (down from $100K) at 2% left that we owe my parents that they lent us for our down payment on the house in 2016. We actually had the money, then went through infertility and used it to have a second child -- no regrets!
Specific Question(s): We have about $80K or more per year (after pre-tax accounts) that we can allocate toward loans, savings, financial goals, etc. IN WHAT ORDER OF OPERATIONS SHOULD WE PUT MONEY INTO EACH POT? These are the candidates (notice student loans are not included):
1. Pay back parents. More of an emotional decision than a financial one since the interest rate is so low. But they are not pressuring us with a due date.
2. Save for a larger house, which would be an addition/renovation (if the market is up) or move to a new place and rent out this one (if market is down). We have 2 bedrooms and we want at least 3, not to be confused with a "large" house, but our 2 children of not of the same sex (probably not of the same gender either, we shall see). We would like to move in or around 2024 unless a good opportunity came up earlier.
3. Put money into post-tax investment accounts and make the most of time/compound interest.
4. Smaller goal, but a $15-20K renovation of our kitchen would make the next 5-6 years in a 1300sqft house MUCH more pleasant, as well as increase the value of the house.
5. Allocate money to our kids' college savings (haven't decided on 529 or some other vehicle, I have a lot of reading to do). First one would hopefully enter university in 2033, the next one 2 years later.
Our goal is FI but not necessarily RE since we both have meaningful work that we can do part time as we age. Please help me make a plan!!!