You need to rethink your "fixed" expenses. $400/month for a car loan is crazy high. It's not really fixed because technically you could sell it and buy a used car in cash for $5000. $1200/month mortgage is not fixed because technically you could move to a smaller house, thereby lowering your mortgage payments. Actually, $1200/month is a lot for a mortgage in a LCOL area. We pay $900/month for our mortgage in a HCOL city. You haven't posted food costs, but if it's over $200/month, then some people here on the forums would argue that it can be lowered. There are lots of ways to lower utility costs, gas, etc., which could then boost your savings rate. A full case study will bring out all the frugal analytical folk who could provide ideas on how to lower your "fixed" expenses.
25% savings rate is not bad (since I just realized you're calculating 25% of gross); most people here shoot for at least a 50% savings rate (of net income), and many achieve it with salaries lower than yours. I'll admit, without knowing your tax rate, it's not a fair comparison though.
I appreciate the response, and will post a full case study once I get time to do so.
A couple notes:
Payment was $875 a month but we refinanced to a 15 year loan 4 years ago to lower interest rate to 3.1%. With a 2nd kid on the way, and only $90,000 left on the mortgage, we won’t be able to find a house to live comfortably for any cheaper than we got this house (unbelievable deal we got on it).
Agreed, $400 a month on a car payment is far too high. I purchased 3 years ago right before I found FI, MMM, Ramsey etc. However, we also needed a stable care for the kids and it really is perfect for our family. I’ll be driving it into the ground, or at least until the maintenance costs outweigh buying a used car. We should have this paid off by end of 2019.
Food expenses are extremely low. We only pay for eating out maybe 3 times a year. Outside of that, we eat a ton of eggs, rice, beans, all types of bulk foods so our food bill can’t get much lower.
This is the same with internet, gas, utility, etc. but interested in hearing tips once I post case study.
Between 401K, 529, .HSA, dependent care, etc. I feel like I have been doing everything I can to optimize every dollar and eliminate taxes, but I’m sure I’m missing something.
To your point about net savings, isn’t that a little more ambiguous being that taxes play such a huge part in that? Since we have a lot of flexibility with eliminating certain tax fees, I would have thought it would be easier to calculate gross savings rate to compare apples to apples.
One of my key downfalls right now, and for the next 5-6 years, is childcare. Once the kids start going to school, I’m hoping the savings rate can really take off.