Hello all-- I've been a fan and reader of the site since October of 2014. We are a family of 4 living in Portland, OR. I am working really hard to roll back a good deal of the spending I, and my wife, once took for granted. Laying out our financial life, such that it is, below has been such an eye-opener for a number of reasons--not least of all our outrageous minimum 'cost of living' expenditures. Unfortunately, there are so many that I can not simply ax, just because I wish it so, and that is my main reason for posting. I am looking for some advice on the best way eliminate my liabilities, and tips on how to reduce my bills, of course. I am not really thinking past that right now. Below are the details furnished to the best of my ability.
Income: Our combined income is approximately $60,000 or $5,000/month (My wife's income is hard to pin down b/c she works as a server, and it fluctuates greatly from month to month. We agreed that we earn approximately the same amount of money per month accounting for her really good months, and my summer overtime numbers. For this reason our current savings rate doesn't necessarily match our remaining income.) --note: we probably could earn more, and may decide to amp up our work load if things really start to roll, but we greatly value our family time, and each of us only works 4 days/week currently.
Current expenses (monthly):
Mortgage: $1225
My Student Loan: $ 210
Wife Student Loan: $ 250
Daughter's Pre-school: $ 275 (Ouch- point of contention, but she loves it and needs it, and out-right rejected our attempted public pre-school placement.)
Car: $ 280
Credit Card: $ 150
Electric: $ 140 (current for winter--could be lower but we have a 2 and 4 yr old who we prefer to keep on the warmer side. Approx. $40 in spring/summer)
Water: $ 100 (Portland, OR water rates are insane--planning on capturing rain to bring this down a bit [doubtful.])
Groceries: $ 150 (AVG) $133(Feb) $78(Jan) $225(Dec) $163(Nov) $442(Oct) --Not including Oct in avg b/c i will never let Groceries go that high again--this was a major problem area
Gas: $ 50-75
Car insurance: $ 90 (Working on this)
Cell phone: $ 50 (Mine-in contract till June) $25 (Wife- just took her off my Verizon plan in favor of Republic) Down $50 from last month, plan on doing $10 Republic plans soon.
Internet: $ 40 (includes entertainment budget, if you nawnsayin'. Except for High Maintenance--we paid for that.)
Trash: $ 25
Restaurants/cafes: $ 117 (AVG.) $160(Feb) $0(Jan) $390(Dec) $0(Nov) $35(Oct)-- Ashamed of Dec, but includes a trip to Georgia, and our first night out in Months. Kids were sick for 2 weeks in Feb, and we needed some relief somewhere.-- Another major problem area.
Miscellaneous: $ 400 (I'm including this approximate number as my wife's contribution to household goods and groceries, home improvement expenditures, and misc child expenses)[I probably need to
hammer this out some more, and I will in due time, but it includes culling through my wife's bank statement's and passing judgments and stating decrees, and there's only so much
one can do in an evening.]
Total: $3,427
Remaining income: $ 1,573
Assets:
Employer 401k: $19,700
Checking/Savings: $1,000
Liabilities:
My Student Loan: $19,854 2,844-- 3.38%
Wife Student Loan: $29,063 28,200--4.00%
Credit Card: $ 4,775
Car: $ 6,500 3,422-- 1.9%
Total: $60,192 $34,466 ($25,726 in total debt reduction in past 12 months)
OK--I've been saving at a clip of around $1000/month since I found this site, which means that my savings has doubled since November 2014. That means that we are bleeding around $400/month somewhere, and I inadvertently accosted my wife about the sum until she abruptly stormed off to bed (--b/c our youngest began to wail in despair.) The way we divide our responsibilities is that I: (1) pay the mortgage, and then save whatever I can; and that she (2) pays all the other bills. Its a division of labor based on our strengths. We are making strides, but we both feel that we can do better.
The reason that I have so much savings in a checking account, and yet such a great debt to lenders is that I was waiting until our tax return cleared-- and now here we are. I think that my wife and I are beginning to feel confident that we can wipe all of these liabilities away. Our goal is to do so in 2 years or less. But, we're a little hung up on logistics.
My feeling is that we should take our savings and lay it on the credit card and the car, freeing up $430 in monthly payments, which would then be rolled over, in addition to the $1000/month I currently save, making for an effective payment of $1640 or more, into my student loan payment-- clearing it in 12 months or less, before tackling hers. Is this foolhardy, or a legit plan of action? I have thought about the interest rates, but half of this plan is about freeing up a little bit of cash, as well.
Thanks for any consideration the board gives our situation, and I welcome a beatdown if one is deemed suitable.
Best,
Phil