Hey guys, here are the details:
I've got 3 kids from a previous marriage (with us alternating weekends/holidays, etc). Ages 15,15,10. And we've got a new baby, less than a year.
Income: Combined $170K. (me @ $60K, her at $110K)
Take home of about $9400
401k her 5%, me 3%
Expenses: $7190
Mortgage: $1980 (yeah, I know, but see below)
Utilities: $250
Internet $70
Groceries: $500 including diapers and baby stuff
Car Payment $330 ( new, just bought, owe 18K at 1.9% apr)
Car Insurance: $80
Gas $180
Daycare $1175
Wife's cell $90
My cell $35 (through work)
Wife's student loans $750 (about $50K left, 7 years left on a 10 year payment plan, dunno the interest)
529 contribution for teenagers 2x $250 = $500 (just started this, up to a measley $2K each)
Eating out/entertainment $150
Child Support $1000
Christmas account $100
Savings $10K
Retirement embarassing, but $3K for me, $10K for her. (We both were just scraping by a few years ago. Just started 401ks recently)
Debt $50K student loans
$18K car
Zero credit card debt! (paid off about $6K in the last 18 months)
SO:
I have 2 kids starting college in about 3 years. A third starting in 8 years, and a tiny one in 18 yeras. I feel that the whole system is pretty screwed (in the U.S) and I want to contribute as much as I can to avoid them graduating with crippling debt. I assume they will get some scholarship money but I know a full ride is extremely rare.
Our situation will be changing in the coming years too.
1. Less child support in 3 years, then obviously none in 8 years.
2. Probably moving to another state with a cheaper cost of living in 8-10 years. Our goal is to cash out on the riduculous property values here and pay cash in a different area, having no mortgage.
3. I'm in a fairly new career, it's a good bet that my income will be at least $70K in the next 3-5 years, maybe much more.
I know I should be putting much more in retirement. But I feel like I should do as much as I can to contribute to college as that's much more immediate. Then, as income goes up and expenes go down, I can dramatically step up retirement. Is this misguided? I suppose I could instead save/invest in general, and later decide to use some of that for college, but I'd lose the 529 tax advantages.
Also, my employer doesn't contribute anything to my 401k, the bastard. Hers matches up to 7% I think.
(And yes, the new car is silly. Wife wanted it to feel safe for road trips to visit family. For what it's worth, we do plan on keeping it for 15+ years and being without a car payment after it's paid off. )
Thanks in advance, I'm curious to see someone else's take on this.
EDIT: Home is valued at $410K, balance is $319K. Rate is 4.1%, no PMI. We're in a pretty hot market, I think values will raise significantly in the coming years.
529- no state tax, fees are .035 max.