Life Situation: Married filing jointly both of us are 35 years old. Im pretty frugal and my wife is less so. Children ages 2, 6, and 10, living in LCOL area. I work for a government agency in a fairly high stress position and my wife does not work outside the home. My salary has been significantly higher over the past 4 years than in previous years.
I began tracking expenses and savings in August 2014 and began focusing on savings rate. Prior to this time, I was naturally frugal but missed many optimization and tax saving opportunities.
Earnings and Deductions - 2015
Gross Earnings $11,784
Health Insurance $136
Dental Insurance $85
Life Insurance $65
Deferred Comp $1,500
401a $940
Vision Insurance $10
Federal income tax $658
Medicare $154
Social security $612
State income tax $514
Net Pay $7,064
In 2015, we also received $5696 federal income tax returns and $1,300 in state income tax returns. We invested the vast majority.
2015 Monthly expenses:
Contribution $106.67
Mortgage/Taxes/Insurance $1,710.38
Water $67.23
Kid activities $107.50
Cable and Internet $120.97
Cellphones $103.80
Gas/Power $264.52
Insurance $124.00
Student Loans $519.87
Doctor Bills $148.77
Prescriptions $148.87
Auto (Gas & Maintenance) $105.40
Groceries $717.14
Entertainment (Movies, Etc.) $56.52
Toiletries/Haircare/Diapers $117.33
Clothing $284.86
Eating out $120.43
Travel $151.36
Miscellaneous $308.47
Home Improvement $137.24
Gifts & Special Events $250.97
Total Expenditure $5,707.74
Mortgage principal is currently $10,000 (about half of total) for the year. We saved close to $50,000 in 2015 not including mortgage principal.
Assets:
Home - $235,000 value (reduced by 6% for realtor commission)
Emergency Savings - $20,000
457B - $83,849
Old 401a - $73,126
Roth IRA - $60,821
Vanguard Index - $54,192
Spousal IRA - $10,825
Stock - $11,153
401a - $10,481 (started investing partway through 2015)
Total - $548,966
Liabilities:
Mortgage - $155,735. 15-year at 3.5%. Paid off in 12 years.
My student loan - $30,210 at 2.75%
Spouse student loan - $51,586 at 3.15%
Total $237,431
Net worth: $322,016
Current Plan: My plan is to keep spending at current levels plus around 3% growth each year. We will continue to max out the 457b, spousal IRA, and Roth IRA. The $18,000 401a contribution is locked in and cannot be changed while with current employer. Im clearly focused on deferring taxes. Any remaining funds (about $18,000 in 2015 thanks to income tax return) would be invested in Vanguard VTSAX. I would like to retire in my early 50s with a likely work slow-down (less stress, less pay) before then.
Not in the Plan: I do not plan to pay extra on loans due to low interest rates. I also do not plan to fund 529 accounts; rather we will help with some college expenses from cash flow based on spouses income at that time (which will be minimal).
Specific Questions:
Does the way that Im allocating retirement funds and other savings make sense?
Does the current plan (above) sound reasonable?
Can I get feedback on current spending levels?
I appreciate each of you for reading this. Thank you.