Hello, let me start out saying I am new here and have been reading a lot on this site over the past 2 days and am really enjoying the reading and ideas. There is a lot of great information on this forum and site. I apologize in advance for the length of my post, but I would really love to get some advice from those of you on here that have the time. I would greatly appreciate it.
I just turned 30, as did my wife. We live in Oklahoma, so the cost of living is pretty cheap. However, we have not made the best decisions leading up to this point with our money and are not in the position financially we wanted to be at this point. Mostly all our own doing of course.
I am a construction manager for a small commercial construction firm. I make $61,560/yr base salary and average about $15,000 - $25,000 in profit sharing/bonuses per year (all before taxes). My company matches up to 3% of my weekly check into a basic IRA account. Currently that is all I've been putting into that account, 3% plus they match that same 3%.
My wife is a preschool teacher and was only working part time, but more recently has been working full time. She only takes home about $600 every two weeks working full time or $400 every two weeks working part time. They offer her no benefits or anything. **Just as a side note, I think it is absolutely absurd that my wife works with and is responsible for children from ages 2-5 and is expected to provide curriculum for these children, etc. for $9.50/hr. It is such an important job that is paid so poorly it is embarrassing in my opinion. She loves working with the kids though, so she sticks with it.**
So our total monthly income after taxes, my 3% IRA contribution, and our health insurance that is pulled from my check (I only pay for my wife, my company pays my insurance, so this is about $75/wk.) is currently about $5,000/month ($3,600 from me, $1,400 from her). If they drop her back to part time that will obviously reduce us down about $400/month.
We have more expenses than I like to admit. Our house payment is $1,350/month, my car is a 2006 Toyota 4runner with 132k miles that is paid off. She has a Mazda CX5 that costs us about $500/month. Outside of those two items we have normal utility bills, car insurance, and then the dreaded credit card payment and line of credit payment. We owe $6,500 on our credit card. This is mostly from our wedding and honeymoon for some additional costs we did not have cash for, and a couple emergency vet bills for our dogs we did not have cash for at the time. The line of credit balance is $8,500 and this was to pay off another credit card and help towards our adoption (we are currently in the adoption process which has almost completely drained our savings, so we used a line of credit to cover the balance so we could keep a little in savings). So the house, one car, the credit card, and line of credit are our debts. We did have money building in savings, but as mentioned, it was almost completely depleted so we could adopt (it's cost us about $25k so far for a domestic adoption). So with all of that in mind, we are left with about $5k in savings which we are now trying to build back up. Our average monthly expenses end up in the $4,500 range typically, but as most people outside of this site do, we overspend on crap we don't need or eating out and seem to be living paycheck to paycheck.
We have inherited a property in the mountains of northern New Mexico that my grandparents bought and then my parents bought from them. My parents haven't had the time to go up there much and more or less handed it over to my wife and I. I grew up going there my whole life for most any vacations we got as my parents never had much money. My wife and I got married on this property and love going up there to get away. Of course this does not happen near as often as we'd like. To have such a beautiful property and only get to visit it about once a year for about a week if we're lucky is just horrible. For those of you familiar with the area it is in Chama, New Mexico near the Colorado Border (about 1hr away from Pagosa Springs/Wolf Creek). I stumbled onto your site while we were up there last week. We got to talking about how we just have to find a way to spend more time there and how we want more freedom so badly. We want to be able to take our child or children to this place that has been so important in my life and now my wife's life and see nature and go hiking, etc.
SO with all of that information here's where I'm at...I want the financial freedom you all have and discuss. I want to be able to spend more time with my family, go to our cabin in New Mexico with our kid(s), have the freedom to not feel controlled by our money situation.
I know I need to first focus on the credit card debt. The $6,500 debt has got to go ASAP. Then I figured I'd focus on the $8,500 line of credit as it is at 10.9% interest. From there I'm not sure. I could try to sell our Mazda and get a cheaper car or something, but we do not have the cash funds to purchase another vehicle in cash and in Oklahoma, where we live, you have to have a reliable vehicle. I drive about 30 miles round trip to work every day and have to drive to job sites throughout the day. I easily put 20,000 miles/yr on a vehicle. My wife drives much less, so realistically she could drive the 4runner and I could get a more fuel efficient vehicle I'm sure for much less than the $500/month we're spending on the Mazda. What would be your suggestion on the vehicle??
Next is the IRA at work, should I up this substantially and not be able to save additional money outside of it until my debts are paid off or should I leave it at 3% and get my debts paid off as fast as possible and then invest the money I would have been spending on the credit card payment, etc.?
Any other advice from that point would be fantastic. For those of you that took the time to read all of that I really appreciate it. I really feel motivated and with our adoption moving along and hopefully having our baby in our lives in the next 12-15 months I want to get us on the right track. I want to turn the corner and start working towards the freedom I have only dreamed about the past 7 years. Thanks again!!!
-Grant