I feel like I am in a financial pickle and need some advice. This year marked the very first year that I was going to be able to fully max out one of my retirement accounts (a 403b). I did so based upon our financial situation at the beginning of the year. I just found out last week that my wife, who is also a college teacher like I am but is technically part-time, did not receive any courses for the fall. We aren't sure why, but it looks like her teaching career at my university may be over.
She is currently looking for another job and I think things will work out, but I like to plan things out ahead of time. Currently, our take home pay is about $6650. She brings home about $2200. I bring home about $4450. If/when she has to go on unemployment for a few months she would earn about $2050 per month.
Our total bills EXCLUDING food and gas are about $4400.
You would think we would be fine right? However, there always seems to be something that has come up where we use that extra money. Part of that is because we spend about $250 per month on gas and about $1200 on food (yes I know that is high for just two people). So that leaves us only about $400-500 for any unexpected expense (e.g. my car just needed $600 worth of repairs).
I am wondering a couple of things:
1) Should I reduce/totally stop my retirement contributions to my 403(b) until she gets another job. I should note that this would NOT stop my retirement savings altogether. I am mandated by our contract to contribute 10% of my salary to a pension fund.
2) If so, should I shore up our emergency fund (currently at 10k) or try to pay down our car quicker. Once that is gone (payment is $625 I refinanced it to a much shorter time period so it made our payment almost double...interest rate is only 2.19%) it would give us even more financial cushion.
We also have some potential extra expenses coming up in the next few months. Specifically, my wife is on her 3rd round of IVF. Thankfully, we live in a state where insurance has to pay for it, but because of two previous miscarriages we are considering doing genetic testing on any embryos, which would cost about $2300 total.
Again, I am not sure what to do.
We are working on reducing expenses, particularly food, but most of that $4400 in bills are pretty much set in stone (e.g. mortgage, student loans, etc). I don't like the idea of reducing my retirement savings, but maybe freeing up some capital by paying off the car/saving more money would be the more prudent option in addition to trying to curb our food expenses, which I would like to cut by at least 1/3.