Hi all,
I am a very new person here and just starting to begin the transition from my previous, self destructive, spendy ways. But, I'm so scattered, I'm not sure how to set our long term goals - and I feel like I need them to keep motivated...here's the particulars.
**already past "early retirement" - I'm late 40's husband is late 50's
**2 kids - 16 & 11 - I want to help out kids with college...
**husband retired - collecting a defined benefit pension plan - he is the driver for the kids - we live in country - and love our house very much
**I work part-time - at a job I dislike - AND I commute 35 miles each way - not ideal for sure - but this really is a rural area and options are very limited
**2 years ago we moved to the rural midwest to be near my aging parents (dad's 90) and we thought it would be a lower costs of living from the city. We were wrong - for the most part - a gallon of milk costs the same as in the city. Rude awakening. But we do like our life better here and I am glad we can be here to help my parents and see the rest of our large extended family.
**I have been trying to get employment near my home for 2 years now...and will keep trying to reduce commuting costs and earn more
so here's the particulars from a $$ perspective.
my husbands gross is 100,000 and (at the moment) goes up each year by 3% - I will also receive his pension if I outlive him, but I will not be eligible for the cost of living increase each year - the benefit "freezes" at the time of death to whatever that fixed number is. (of course, I live in fear that with pension reform storming the US - we could be hit. - he was not permitted to pay into social security - so the pension is it for him. But the 'experts' say that current retirees will not be affected by any reforms.)
my gross is around 50,000
we have 175,000 in retirement accounts
we own our cars (old/high mileage)
we do not own our house - we owe 200,000
we have about 100,000 in equity in the house (just bought 2 years ago on a 30 year)
From this we pay:
13,000 in medical insurance costs per year (I know it's crazy - daughter and husband have medical issues)
24,000 in housing - mortgage/taxes/insurance are 1,500 per month - we pay an additional 500.
In the past, CRAZY living expenses to the point that we have nothing really saved in the past 2 years - yes - I know it's insane - that's why I'm here and looking to change our lives. It's never too late right??
My immediate goal is to cut our expenses so that we live off of husbands take home only (5,900) this is very doable - I just cut 500 from our first months' grocery bill by planning and paying attention! So I know by implementing more changes we will get there. My goal is to have this accomplished by September at the very latest.
second goal is to stash some money in a vanguard index fund - earn money on the emergency fund. Maybe about 10,000.
Then the big questions come in:
If we can save all of my take home (apx 3,000 per month) and even some of his pension, what should we do with it?
Throw everything at housing to pay off the mortgage? College planners say kids who's parents have mortgages get more non-loan financial aid - aid is good. But I must say the oldest also really likes the idea of studying overseas...and have heard it is cheaper - bonus.
put it into investments - and if so, IRA's or something more liquid? I like the tax write off for IRA's and hubby is only 2 years from 59.5.
put it into 529 plans (college savings accounts)
Should i quit? I really do not enjoy my job, but I like to work. This also pulls into play the whole college aid thing - me quitting would reduce our income....not hugely, but maybe just enough for the oldest to still qualify for some need based scholarships. But I like the idea of using my income to really impact our lives.
I feel like I need to have some long term goals here to be and stay motivated - but I'm not sure where to go with this.
thanks for opinions....