Overview:
I'm 38, wife is 35 with 3 kids - 15, 11, and 5 months. Up until I got my current job, we struggled.
Life made us her bitch the past 2 - 1/2 years. We had a daughter nearly die at school, almost lost our house to default - twice, gone on public assistance, and sold possession to make ends meet - including our wedding rings.
When I returned from a deployment as a reservist in 2011, I didn’t have a job waiting for me. I decided it was time to go back to school and utilize a retraining program, however, along the way I lost my unemployment benefits due to a SNAFU with the state employment office; it was eventually resolved but drained our savings ($15,000) in the process.
A few months later, my daughter got hurt at school and was in the ICU for 6 weeks, my wife was the only one working at the time - I was a full-time student, and we spend every waking moment at her side.
When my daughter eventually came home, with my wife's employers blessing, my wife took 6 months off to oversee her rehab. After months of looking I found a part-time job that would jive with my school schedule and cover most of the income lost. Eventually the company was bought out and my position was eliminated.
My wife went back to work, with a lighter schedule - 40 hours a week to about 16, mostly because her clients recognized her and she refused to discuss what happened to our daughter with them. Eventually she became a zero hour employee.
A month later I found another job, but quit after 3 months because 14 hours days (8 hours of work + 3 hours of school + 3 hour round-trip commute and no weekends) suck - I was burnt out and tired of not seeing my kids.
I wound up working as a contractor for the military, barely making ends meet at $20/hr, while my wife was on maternity leave from her job. I was laid off right before Christmas and lived on unemployment of $875/ month until I was offered my current position as a Field Engineer.
Over the past 2-1/2 years - we survived. Luckily we had health insurance so the hospital stay didn’t ruin us financially and a really supportive family helped us through.
Living on $875 a month was certainly an eye opener. Now that we've weathered that storm, I'm looking to trying to make a better financial future for my family. Our goals are to eliminate debt, buy about some land, build a comfortable house with a small hobby farm, and retire in about 12- 15 years.
Saving for college would be good, but not a priority, we believe our kids should learn the value of hard work to get a college education. Also they don’t know but when their grandpa passed away 7 years ago we put a sizable amount of his life insurance policy in a trust fund for the oldest kids. We also were debt free for 2 years aside for cars and a mortgage, but pissed that away.
Honestly I have no clue where to start. I just got caught up with some past due balances the last few paychecks and want to start making my earnings work for me, vice me working just to pay others.
I’ve never been good with money to start with, I grew up in a very low income household and saw anything extra as “fun” money and buy status items, and my wife has a similar background. We’ve recognized our folly, learned frugality, and hope some kind mustachio’s would provide some advice on how to get us to where they are at today.
Additional Info: I maintain 2 separate residences; I live 1000 miles away from my family and it’s cheaper the rent an apartment than it is to pay for a flight home every weekend (on the road 4-5 nights a week/ company paid travel).
The family will be moving out with me once school is on summer break and we plan on renting out our home, providing a possible revenue stream. We could live anywhere we want for my job, but prefer to be close to my company’s home base, so that on the days I’m not out in the field I can spend more time with the family.
My wife, plans on being a SAHM until the baby is pre-school age (3-4). She does have a small craft business, mostly hair bows and baby hats and brings home a small income of about $100 a month, which mostly goes back to materials. I don’t include this as income since all profits are reinvested to her business or donated to church.
Oldest daughter attends a private school, paid for by her own separate trust fund. We plan to send youngest to private school also, but that expense is 4 years in the future.
Undergoing some legal “stuff” with the military. If all works out, I will be officially retired for the service due to injuries and will receive retirement and healthcare benefits.
Income: $9209.50
**My income is dependent on overtime and performance bonuses**
VA Disability Benefits - $258/month
Employment: Base Salary - $43680/ annually
Average Yearly Pay - $101010
Average weekly pay is $1942.50
Salary (40 hours) @ $21/ hour: $840/ week
Overtime (35 Hours) @ $31.50/ hour: $1102.50/ week
Monthly reimbursement from company for meals while traveling: $534.00
Current Expenses/ Debts: 6225.26
Taxes and Deductions (Medical/ Dental/ Life Insurance): $1183.46
Mortgage: $1060 (Owe $205,000)
Student Loans: $395 (Owe $45,000)
Car Loan: $150 (Owe $5,500)
Visa: $50 (Owe $2,600)
VA Debt – Over paid benefits: $258 (Owe $2064)
Apartment Rental - Mine: $500
Internet - Mine: $40
Cable TV/ Internet - Family: $100 – once they move we will be cutting the cord forever.
Water - Family: $75
Electricity – Family: $125
Car Insurance: $141
Garbage - Family: $34
Cell: $150
Wife gets an allowance of $1680 per month. This allows her to pay for food, gas, and other miscellaneous items for her and the kids.
I budget $300 a month for food, gas for my personnel vehicle, and personnel expenses.
Assets: ($3800)
Savings Account - $1000
1998 Chevy Suburban - $2800
Liabilities: ($260164)
Mortgage – 205,000 - 2.75% (30 year/ 28 left to pay)
Student Loans - $45,000 – 6.7%
Car (2001 Subaru Outback): 5500 - 12%, needed a second car so wife could take kids to appointments and school.
Visa: $2,600 – 29%
VA Debt – Over paid benefits: $2064 - 1%
Question(s):
What should my spending priorities be? Do I pay down debts, save for the house, look for ways to cut back on expenses? Like I said I was never good with money, but am learning that it is a valuable tool
In a few weeks I will be eligible for my employers 401K Plan, they match up to 5% of my base salary and was thinking about just contributing 5%. Is this wise or should I be contributing more? Should I be looking at other avenues of investment like a 401(K).
I also need to save about $10000 in the next 3 months, to pay for moving expenses (company reimbursed) and deposit for a rental unit in the new area, what would be the most effective way to do that?
We are looking to buy land / build a second home in the near future, is this feasible or should we continue renting until we pay off our debts and afford land and a home outright?
My AT&T contract is up. I’m trying to convince my wife to switch to a pre-paid carrier like Straight Talk, but she loves her iPhone too much. I’m switching to Straight Talk soon or should I cancel service all together since I have a company paid phone?
I’ll likely have a bunch more questions later.
Thanks!