The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: mimi on September 12, 2012, 06:43:50 PM
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I am new to the forum and curious to see if anyone has any new ideas for me :)
Lets see....
Family breakdown: We are a single income family. Hubby (31yrs old) is in the military and I (31yrs old) am a SAHM. We have 5 children under the age of 8yrs old, with another one due in January.
Financial: We are debt free and renters at the moment. We will not be buying a house until DH retires from the military in 12yrs and we settle down somewhere.
Current breakdown....
*Income after rent, utilities, and healthcare (all of which are paid via the military allowance to our base housing and tricare) is $25,000 a year.
*Total per month to savings at this point is $1,400 a month. Will be going down when dh gets home from deployment.
*TSP at $15,000 balance, $5k a year added
*My roth at $10,000 balance, $5k a year added
*$5k in savings for emergencies
*$4k in savings for a used car for dh when he returns from his deployment (he was in an accident right before he left that totaled his car and we never got him a new one before he left).
*Nothing in savings for a larger van for carrying all these kids around ;)
*Nothing in savings for kids college
*Nothing in savings for a down payment on a house someday
The plan at this point is to throw all our free money to saving for the larger van (will be selling my van and buying either a 12 passenger van or a 8 seater suburban with cash). Has to be bought by February 2013.
Once the van is bought we would then throw all the money into savings for a down payment on a house with the stipulation that the money could also be used for college costs or large emergencies that might arise.
Once down payment on house is in savings we would then start to think about saving for college for the kiddlets. We have the GI bill to split among the children as well and with as many as 4 children in college at once I am sure there will be financial aid available as well.
So that is OUR plan but I am curious what others think about the situation and what YOU would do if it were you
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With your 12 year time frame I'd be looking at investing your spare money, not saving it.
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You lost me on the 12 or 9 person van. I suppose once the new child is born, you might need room for 8, but certainly not 12. One other thing to consider: how often will all 8 of you be going somewhere at the same time? If this will be a rare occasion, consider buying a smaller, more fuel efficient vehicle and renting the larger vehicle for the occasional trip. Another possibility is to buy a small used car, which will serve as the primary transportation, and a second, also used, van for the less frequent, full family trips. I'm not sure if either of these possibilities is realistic for you, but I would sure hate to see you driving around in a 1/4 occupied full-sized van running errands.
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With your 12 year time frame I'd be looking at investing your spare money, not saving it.
Yes once we get to a certain amount it will be invested in some way. Not sure what at the moment, but it will not be sitting in a savings account just earmarked for a down payment when it is used.
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You lost me on the 12 or 9 person van. I suppose once the new child is born, you might need room for 8, but certainly not 12. One other thing to consider: how often will all 8 of you be going somewhere at the same time? If this will be a rare occasion, consider buying a smaller, more fuel efficient vehicle and renting the larger vehicle for the occasional trip. Another possibility is to buy a small used car, which will serve as the primary transportation, and a second, also used, van for the less frequent, full family trips. I'm not sure if either of these possibilities is realistic for you, but I would sure hate to see you driving around in a 1/4 occupied full-sized van running errands.
Because of my husband's military career I have to be able to take all the children with me at all times. There are times when I have no notice that he is leaving for months at a time and I have to take all the kids to the grocery store with me, or the dr's, etc. Where ever I go they all have to be able to go as well. We do not live near family and I can't ask my friends to watch my children every time I need to leave the house. The front seat is out for a child because all my children are still under the legal age to ride in the front seat. So I need 6 seats in the back. We are considering a suburban that seats 8 but I am concerned that there is no storage room in the back. Where would I put the stroller or the groceries kind of thing. The 12-9 passenger van would give room for seats, room as they grow into teenagers and need more elbow room, and leave room in the back for storage of groceries and such. All errands where I can use my husband's smaller car I will for sure be doing that.
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With your 12 year time frame I'd be looking at investing your spare money, not saving it.
Yes once we get to a certain amount it will be invested in some way. Not sure what at the moment, but it will not be sitting in a savings account just earmarked for a down payment when it is used.
Setting a future nebulous date to do something is generally not the best way to improve one's situation.
Any reason you aren't taking action on that now?
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With your 12 year time frame I'd be looking at investing your spare money, not saving it.
Yes once we get to a certain amount it will be invested in some way. Not sure what at the moment, but it will not be sitting in a savings account just earmarked for a down payment when it is used.
Setting a future nebulous date to do something is generally not the best way to improve one's situation.
Any reason you aren't taking action on that now?
My husband is active duty and we move every 2yrs. Buying a house now is a bad bad idea. We plan to buy a house when he retires from the military in 12yrs.
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With your 12 year time frame I'd be looking at investing your spare money, not saving it.
Yes once we get to a certain amount it will be invested in some way. Not sure what at the moment, but it will not be sitting in a savings account just earmarked for a down payment when it is used.
Setting a future nebulous date to do something is generally not the best way to improve one's situation.
Any reason you aren't taking action on that now?
My husband is active duty and we move every 2yrs. Buying a house now is a bad bad idea. We plan to buy a house when he retires from the military in 12yrs.
Yes. I was referring to this: Yes once we get to a certain amount it will be invested in some way.
Why wait until a "certain amount" (which doesn't even seem like you have a specific amount in mind yet).
To clarify, you said "Once the van is bought we would then throw all the money into savings for a down payment on a house with the stipulation that the money could also be used for college costs or large emergencies that might arise."
With 12 years to go until the house, gooki recommended investing it rather than just "saving it" - and you said you would at some certain amount. I was saying that you should start that as soon as the van phase is completed.. not at some nebulous future point.
Did that make more sense, or did I just muddle it up further?
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With your 12 year time frame I'd be looking at investing your spare money, not saving it.
Yes once we get to a certain amount it will be invested in some way. Not sure what at the moment, but it will not be sitting in a savings account just earmarked for a down payment when it is used.
Setting a future nebulous date to do something is generally not the best way to improve one's situation.
Any reason you aren't taking action on that now?
My husband is active duty and we move every 2yrs. Buying a house now is a bad bad idea. We plan to buy a house when he retires from the military in 12yrs.
Yes. I was referring to this: Yes once we get to a certain amount it will be invested in some way.
Why wait until a "certain amount" (which doesn't even seem like you have a specific amount in mind yet).
To clarify, you said "Once the van is bought we would then throw all the money into savings for a down payment on a house with the stipulation that the money could also be used for college costs or large emergencies that might arise."
With 12 years to go until the house, gooki recommended investing it rather than just "saving it" - and you said you would at some certain amount. I was saying that you should start that as soon as the van phase is completed.. not at some nebulous future point.
Did that make more sense, or did I just muddle it up further?
Gotcha :) I have not decided what I want to invest the money in at this point. I know that with certain funds and such there is a minimum required to buy into them. So once I figure out WHAT I want to invest the money in then I will start investing in it when I have the minimum amount to go in to it. Still have 5mths to do some research on the topic before we will even start saving/investing in anything other than the new van.
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Many of the benefits of mutual funds can be had by purchasing ETFs, which have no minimum investment (apart from the share price).
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Is your Roth account a Roth IRA or Roth TSP? If you aren't doing so already, I'd suggest putting money toward the Roth TSP while your income is at a relatively low level given your deductions/exemptions. And remember, we always want our military to be as safe as possible, but all pay earned while spent in a combat zone is tax free. This means during those periods you would want to direct all TSP monies to the Roth TSP (essentially an investment vehicle with zero tax) but during the non-combat duty I would suggest some combination of the two.
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6 children? x_X Too many kids. Children are way too expensive.
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An inspirational link. She is definitely badass.
]ikeportland.org/2012/06/28/with-six-kids-and-no-car-this-mom-does-it-all-by-bike-73731 (http://ikeportland.org/2012/06/28/with-six-kids-and-no-car-this-mom-does-it-all-by-bike-73731)