Hello! I've been reading MMM for about 4 months. I just got married last November and my wife and I are in the market for a home purchase. For us, this makes financial as well as emotional sense, since we are in a market where good housing is cheap, rent is high, and we want to have a house with a yard, garden, etc. We're not being stupid with the home search and only looking for houses that are much below what the banks will "pre-approve" us for. We want to live simply but are also looking forward to the future when my wife will stay home to raise children, if we are able to have them. That's the goal, at least.
Without further adieu, here's the details:
Income:
$7600 (after taxes, deductions, 401K contributions)
Current Fixed Expenses:
Rent: $1300
Auto Payment 1: 336 (3%, $6k remaining)
Auto Payment 2: 245 (6.5%, $8k remaining)
Student Loans: $200 (2%, $19k remaining)
Current Monthly Variable Expenses (using Mint, averaged over last 6 months)
Auto Gas/Insurance/Maint: $363
Cell Phone: $150
Internet/TV: $120
Electric: $45
Home Supplies: $60 (cleaning supplies, T.P., etc.)
Personal Products: $45 (makeup, soap, etc.)
Doctor: $240 (wife has on-going medical needs for the time being)
Food: $370 (includes groceries and dining out)
Gym: $45
"Fun" Money: $150
Total Monthly (fixed + variable) Expenses: $3669
Comments: We both had purchased cars before we got married, and when we're done paying them off, they will last a long time and we will never again have two car payments at once. Also, my wife is starting a new job soon with better insurance, so her doctor visits will decrease significantly in cost.
Current Monthly Savings:
401k: $500
House Fund: $3900 (I recently capped my 401k contributions to 6% to get the match but to be able to increase the size of our cash fund for house downpayment. I want to be as close to 20% as I can so as to avoid PMI)
Total: $4400
Current Assets:
401k: $49k
Rollover 401k/IRA: $100k
Roth IRA: $45k
Emergency Fund: $17k
House Fund: $38k
Total: $249k
Specific Questions:
1. After we buy the house, what debts should we go after first? My thought we be the auto loans, in order of highest interest rate. The problem is that the one with the highest interest rate is my wife's, and she has a low credit score due to minimal credit history. (That's why the mortgage will be in my name.)
2. After we buy the house, should I increase my 401K payments to max them out? Or go after the debt first and then max 401k?
3. I am in a relatively stable industry, but should my Efund be larger?
Thanks for your help!