Rates on the loans? PMI on the mortgage?
Are you getting your employer 401k match already? Do I understand correctly that the match is 1:1 up to 3%?
A couple quick thoughts:
- Look at your taxes and see if it's beneficial to raise your 401k level now to get down to a lower bracket. If not save this for a few steps later.
- Build up an emergency fund, this is critical to protect youself and the kids if either of you lose your job. It will also make the transition easier if/when one of you moves to stay at home.
- You/We need your % for loans and mortgage to decide what to do next. I used to have 6 & 8% SL but refi'd to SOFI down to 3% and will have it paid off this year. I also refi'd the house to eliminate PMI. After eliminating PMI, if the rate is 4% ish it will be better to max the 401k assuming you're not underwater on the home. If underwater get that right side up.
Congrats on the good work. Keep it up. If you guys start getting burned out maybe see if she can drop one shift. Keep it up!
Welcome to the forum.
Yeah we need to know the interest rates to give you a good answer. Also, what's your house worth? Can you consider selling that and finding something cheaper, or is this cheap for your area? That's a big mortgage to try to pay down.
In the 25% bracket, without any further information on the interest rates, I'd recommend maxing out your 401ks and Traditional IRA's to get down into the 15% bracket.
I wouldn't worry about an EFund. Using the IRA can work, so can a HELOC.
This is from a year ago, but it shows you some of the things to think about, and gives you an idea how diverse this community is on this issue.
http://forum.mrmoneymustache.com/ask-a-mustachian/let's-settle-this-with-a-vote-invest-or-payoff-debts/
Amount Monthly Payment Rate
Student Loan 1 $4,058.47 $50.93 4.25% My Loan
Student Loan 2 $2,247.57 $27.01 3.15% My Loan
Student Loan 3 $9,204.32 $113.12 5.16% My Loan
Student Loan 4 $543.42 0 6.80% My Loan
Student Loan 5 $536.24 0 6.80% My Loan
Student Loan 6 $7,213.63 0 6.80% Her Loan
Student Loan 7 $7,549.26 0 6.80% Her Loan
Student Loan 8 $3,649.39 0 6.80% Her Loan
Student Loan 9 $2,794.81 0 4.50% Her Loan
Student Loan 10 $3,218.01 0 3.40% Her Loan
Student Loan 11 $1,229.63 0 6.80% Her Loan
Student Loan 12 $3,526.60 0 6.80% Her Loan
Student Loan 13 $3,257.13 0 6.80% Her Loan
Student Loan 14 $5,500.00 0 4.66% Her Loan
Student Loan 15 $7,000.00 0 4.66% Her Loan
Student Loan 16 TBD 0 4.66% Her Loan
*Student Loan 16 is the final one. No additional loans....EVER.
Total $61,528.48
Home could be sold today ~$375K. Paid $331K Sept 2014. DFW Area.
Since I am the only one with a Graduate level degree (MBA), I assume I can only re-fi my student loans via SOFI. However, I only make up $16k, not sure its worth it.
I am maxing employer contribution already. They do 6% (50c:$1) so 6% plus 3% from them.
Thanks for intial feedback!