Where can we save/cut and can I ever go on a vacation again? We are a family of three - I am 31, husband is 44, baby is 18 mos.
Income:
98K - me
118k - husband
Husband carries all our medical/dental benefits due to possibility of me taking LWOP to care for child/future maternity leave if we have another, etc. We both contribute $18k to our 401k plans, plus 5% employer match. After taxes, contributions, health/dental, life insurance, etc, our take-home is $1900 and $2089 every 2 weeks ($103K/year).
Debt:
$485K mortgage at 3.875%
$7100 on a pension buy-back (husband) - he pays 100 every 2 weeks automatically deducted from his check. In march this begins accruing 3% interest. It's a good deal to buy back his military service.
Monthly after-tax expenses (out of the $103K):
$2827 - mortgage
$300 - extra mortgage principal
$1062 - daycare for 18 mo baby
$916 - Roth IRAs
$450 - 529 for baby
$150 - phones & internet
$100 - avg utilities (this varies a little depending on season and water is quarterly). We use a wood burning fireplace insert and blower to provide the majority of our winter heat.
$150 - gas, entertainment, eat out on occasion
$450 - groceries and household expenses
$1000 - home improvement (we bought a lemon that some people call a fixer upper. We in-source most of the work. So far we have removed 30 enormous trees from the 1/2 acre property (OMG), landscaped a bit, installed hardwood floors on the first floor (ourselves!), painted kitchen cabinets (ugly golden oak eyesore originally), replaced first floor trim, painted, installing new windows now). We are going to have to renovate a bathroom soon because it is leaking into the living room.
$1000 - leftover. This often goes to a taxable account (index fund) but I was dreaming of a vacation one day. Also, we need to save if we hope to have another kid one day. Double daycare plus double 529 would bankrupt us now.
Assets:
Home equity - I don't count this, even though we bought last year for $495K and I'm told it's close to $520K now. Whatever. We would have nothing if we sold.
Savings - $8000
Husband IRAs - $25K
Husband 401ks - $90K
My 401K - $160K
My IRAs - $40K
Random stocks & DRIPS I started as a single person: ~$12K
Index fund I started as a single person - $45K
I own a 2013 Nissan Altima outright (paid cash). My husband totaled his 10 year old pick up last week. He is going to get about $11k for it from insurance, only because we had receipts for $5K of maintenance from the last 12 months (including 1100 in new tires from the day before he was T-boned). Even though we live ONE MILE from work (daycare is a half mile, on our one mile commute!!) and I want to poke my eyes out at the idea of consumer debt, he has made it clear he will not live with just one car for our family and is taking a loan tomorrow for the balance to buy a used 2010 pick up for $18K. He says it will be at 1.7%. He will not wait until we can save the cash for the purchase. He says he really uses a truck (which was true last year with the 30 trees we took down, but now they are gone and we won't be taking down more trees for a few decades...) but I can see now it is just part of how he thinks of himself - as a "truck guy."
Our savings of only $8K is money I don't feel safe touching for the purchase. I would like to have $10K in savings/emergency money. We had about $70K a year ago but had to move for work, and it took forever to sell our previous home. In the meantime, it needed repairs, and that mortgage was about the same as the current one. We had put about $120K into it, and after painfully lowering the price, and realtor fees, we got back $6K which I used to max our IRAs and drop into the 529. It was awful, and I wanted 2016 to be a rebuilding year with maybe a small vacation, but I don't see how that's possible with my husband's determination to buy a truck and my fear of debt that will drive us to pay it off as soon as possible. He did not save much for retirement until we married 2 years ago and I forced him to save the max, and because of his age (44) I don't feel like we can cut back on the savings there. We are really fortunate to live close to work and daycare. The house still needs a lot of work which we are mostly doing ourselves. I just don't see where the extra funds to save, increase index fund contributions, have a second child (circa 2017), and take a much-needed vacation can all come from. I spent half of last year as a single mom with a full-time job while he was working overseas, and I am just freaking tired. I feel like I've done a lot to cut expenses already - I cook all our meals and shop sales/bulk purchases, hang dry laundry, use cloth diapers, we insulated the attic to save on utilities ($700 of insulation vs monthly heating bills of $250 last winter...), clean my own house, etc.
Is the best option just to look for ways to make more $? I wanted to go p/t this year to spend time with my kid, but I think we need all the $ we can get now. I was hoping we could retire when he is 62 (retire together, so I'd be in my 40s) but I'm realizing I may be working much much longer. Suggestions?