Hello! I’ve been lurking and soaking in the wisdom of this site since I was a graduate student in South Carolina. After working at a real job there for a year, I took a great opportunity (essentially a dream job position) to work in the cultural resources field for New York State last July. My husband found a job last month, and now we’re re-examining where we are, how we can improve – and some options that are beginning to present themselves. We appreciate your help!
Income: 52,000 (hers) 31,000 (his). Monthly, this looks to shake out at about $4300 after insurance, HSA, retirement, taxes, etc. is taken out. (His paychecks are still new, and are settling in as things like retirement begin to be taken out)
Assets:
Checking Accounts (Joint and Personal): $495
Savings Accounts: $1723 (Includes joint, personal, part of our e-fund, and set-asides for irregular expenses like auto insurance)
Mortgage Match Savings: $375 (We signed up for this matching program for first time buyers, but are now income-ineligible. We plan to continue with the savings plan and take advantage of the classes offered)
Betterment (E-fund): $3425
457(b): $1825 (Just hers – he is starting his up this month. Still very small!)
Ally Savings (for house): $6,153
TOTAL: $13,996
Liabilities:
Credit Card at 11%: $495 (atypical; from Christmas travel, paying off this month)
Car Loan at 0%: $3,500 (only vehicle, nearly paid off and no regrets!)
Student Loan 1 @ 2.8%: $2,034
Student Loan 2 @ 5%: $2,464
Student Loan 3 @ 5%: $2,760
Student Loans (several) @ 6.8%: $34,615
Student Loans (several) @ 6.8%: $22,114
TOTAL: $67,982
Ouch, student loans. We’re using the snowball method to overpay on all of them. We had a much lower income for most of last year, and were able to pay off $14,000. At our current rate (under expenses), they should be paid off in three years.
Current (Monthly) Expenses/Set-asides:
Rent: $820
Gas: $60
Car Repairs: $15
Car License/Taxes: $30
Auto Ins: $65
Renters Ins: $9
Food: $200
Restaurants: $50
Good beer: $50
Netflix: $9
Laundry: $15
Dog: $35
Vacation savings: $50
Gen. toiletries: $20
Clothes: $40
Entertainment: $10
His pocket money: $30
Her pocket money: $30 (pocket money is new for us – we’re trying it out now that we have a second income)
Car payment: $200
His Student Loans: $1000 (min. $350)
Her Student Loans: $1100 (min. $540)
House savings: $75
Mortgage Match: $125
TOTAL: $4,038
We’re still working out the new incomes, and we have chosen to continue to live off of one income and use the second to help achieve our goals more quickly (paying off student loans, and saving for a house). We keep our expenses low – we’re both walking or biking to work, we eat frugally but well – but we do have a few small extravagances like our beer and our once-a-month dinner out. We realize our hair is on fire, but we consider a good beer with dinner a few times a week a small luxury.
Everything seemed very straightforward in terms of simply paying off loans as quickly as possible, but we recently came across a house that is very attractive – and we’re tempted to move out of our apartment sooner. It’s two miles from our jobs (walkable!), has lots of historic details that I love (I’m a historic preservationist, and I definitely want a house that someone hasn’t screwed up), it’s a good size (2200 sq ft), has a fenced backyard for the dog, and is only $63,000. We’re very wary of the price – and I know that there are some things that are over our heads to fix. We’ll visit in a few weeks, and see if it is too much of a fixer-upper to manage.
So, the question is – would it be reasonable to even be thinking about considering buying a house given our income and debts? We’re definitely planning to be in this area for good. We had put off buying a house for another year and a half, but we’re sorely tempted.
We appreciate your suggestions for reducing expenses, and unbiased opinions as to what makes sense for our next step!
