Hello Fellow Mustachians,
My wife and I will hopefully be going through some life changes in the next year and are somewhat concerned about what our financial situation might become. We currently rent a one-bedroom apartment in Queens, NY and work in the city. I am 28 and she is 27 and our combined income is $96,000 (I earn $60,000 per year as an office administrator for a university and she earns $36,000 as a manager at a museum). This amounts to about $5700 per month in take home pay. A year from now (or at least at some point in 2014) we hope to have bought our first home and have had our first child. My wife has a very close extended family who all live near each other in the Rockland County, NY/Bergen County, NJ area and we would like to raise our kids in that atmosphere.
Where we are now:
$43,000 in savings
$30,000 in 5-year CD at 2% (we have 3 more years on this I believe but the early withdrawal penalty is extremely low and we'll make interest even if we withdraw early)
$30,000 in my Vanguard Roth IRA
$5,000 in wife's 403b
Our current average monthly spending is about $3500 per month which includes $1525 for rent and $400 to pay back a student loan at 0% interest (wife's parents bought out the loan).
Given the housing prices for 3br/2ba homes in the area we'd like to live, we're probably looking at monthly payments of $1750 for our mortgage and property taxes (provided we get a home in the $275k range which is about average for a very modest home in the area). On top of this, if we both continue working, we're looking at $800 per month in transportation costs to the city (monthly NJ Transit + monthly subway). And on top of this, if we both continue working, we'll have childcare costs that will probably run us at least $1000 per month. This comes to $3550 per month and when you take into account our other expenses (food, utilities, etc.) I feel like we'll be able to save very little. And if my wife stops working, we'll save $1400 in childcare and transportation costs, but we'll also be losing her $2100 take home income.
Does anyone have any thoughts on this and how we can live near family while also being able to save a good chunk of our income each month?