I’m new to the MrMoneyMustache Blog, and the more I read the more intrigued and interested I am. I want to start some of the principles outlined here, but am a little unsure on where and what to do to start. Here’s some basics, and I’d appreciate any advice.
I am 39 years old, married, with three small children - 6, 3, and 1 ½ year old. I work full time making $70,000 per year. My wife (37 years old) is a teacher, and makes $50,000 per year. However, she feels like she needs to get off the crazy working mom merry go round, so we decided that she will stay home for a year or two, to spend more time with the kids when they are this small. We will be living on one income starting in September, and are prepared to start to slim down our spending on non-essential costs.
We currently have a mortgage, a rental property mortgage, and a car loan, but otherwise have no debts. I make $70,000 per year, and contribute up to the company match (5%) to my 401k. I stopped contributing to my Roth to prepare for my wife’s leave of absence. We currently have two capital one 360 savings account with $7,000 that we use for extra unexpected expenses, and have $28,000 in an emergency fund, both making minimal interest (1%ish). I also contribute to a FSA for childcare costs.
Current Expenses:
Mortgage: 3.6% interest, & HELOC: 7.49% interest with a $31,000 balance - $2,800 per month
Car Loan: 1.9% interest, $14,500 balance, $500 per month
Other Living Expenses (food, internet, insurance, etc) - $1,800 per month (expecting to cut some costs in September)
Income:
Work Salary Net (After 401k contribution & FSA deposit): $70,000 annual
Rental property: $1,700 annual
Savings/Retirement:
Capital One Savings: $35,000
401K: $85,000
Roth IRA (Target date retirement funds) : $128,000
Wife’s pension
College 529s: $7,000
While we think we are generally doing well, we’d like to be making the best money decisions. Should we move some of our capital one 360 savings to an index fund, to get a better return and interest rate? Should we focus any extra money on paying down our mortgage or car loan? What’s the best place to start to have our money work the best for us? Do you have any additional advice?