Life Situation: We are married, 33 and 34 years old, respectively, with 2 children ages 4 and 8. DH runs an electrical contracting business (one man show) and I am primarily an SAHM, but I pick up some substitute teaching work here and there.
Gross Salary/Wages: in 2013 we paid taxes on $40,000. Last year we paid taxes on $27,000. This year we demolished that in the first quarter. I'm projecting to possibly triple last years profits by the time the year is done. What we've been doing is just taking a shareholder distribution of $2300 a month and taking a larger distribution of $6,000 at the end of the year. We leave the rest of the money in the business. I bring in only about $1200 a year subbing.
Current expenses:
Monthly:
Groceries:$400
Land Contract payment: $277
Utilities:$248
Gasoline: $130
Health insurance:370
Medical/dental expenses: about $57
Internet:49
Netflix:17
Gym:40
Toiletries, cosmetics, cleaning products, etc.:20
Entertainment, clothing, lunches out, other unnecessary bullshit:$244
School expenses averaged out:$25
Hair cuts:$20
Here are things we set an annual budget for:
Life insurance:425/yr
Auto and homeowners insurance (one bill):1864 (we have 2 cars, a 2005 Impala, which is my car, and a 1998 Ford Bronco, which we rarely drive.
Property taxes: 1400
License and Registration:225
Gifts:700
Kid activities:1000
Trash pick up:150
Optometrist:150
Vacations:900
Other:240
Assets: Amount & description - 2500 in a Roth IRA mutual fund, 1500 in another Roth IRA mutual fund, 2,000 in my husband's Fidelity account
$21,000 in a savings account for emergencies and purchases we agree on.
Liabilities:
We are in a land contract with my husband's parents. The original cost of the house was 69,000. They charge us 2.5% interest. We owe about 59,000. It has a 5 yr.balloon, so we will have to either get a real mortgage next yr or sign a new contract with them.
No other debts.
Specific Question(s): should we pay more on the house or should we invest more? We are torn, because 2.5% is so low, but it is also his parents' money. If we do invest, should we put it in retirement accounts or something else? (Clearly we can cut our spending on silly stuff, so no need to mention that!)
Also, should we take more money in shareholder distributions or should we leave the money in the business?
Now that the business is doing better, and I'm starting to get excited about saving, I'd love to have a plan in place so my husband isn't tempted to buy a $1200 bicycle!