Hi all,
Since I've discovered the site/lifestyle we've began to make changes towards our goals, and I just wanted to get the community's opinion on what we could do better. Thank you all ahead of time for posting and helping, this community is definitely one of the most fantastic I've ever been a part of
Background:
I just turned 28 and my wife 27, we have been working in finance/accounting jobs for 4 and 3 years each, respectively, and we are trying for our first child
Monthly Income:
Me - $7,500, Wife - $5,625 = $13,125 total pre-tax
401K (Projected) - ($3,000) total
HSA - ($425)
Medical - ($400)
Taxes (Projected at 20%) - ($2,625)
Net - $6,675
I just started my new job 4 months ago so am not sure if there's any bonus potential, assumed to be $0. My wife received a 20% bonus last year (prorated as she started in May) - which we deposited straight into a Roth IRA for her
I will max my 401K this year, and we will be aiming to max both mine and hers next year, I have maxed my Roth IRA for the year, while we are waiting to see if she will receive a bonus this year (if not, we'll try to max hers from some other source)
Also currently maxing HSA - Company contributes 1,500, I'm responsible for other 5,100
Current expenses:
Mortgage - $1,732 ($230K 30 year 4.125%)
Groceries - $700
Eating Out - $600
Auto - $600 (One paid off 2001 CR-V, one new 2014 CR-V)
Gas - $300
Utilities - $250
TV/Internet - $110
Gym/Supplements - $40
Miscellaneous - $800 (Definitely overboard, this has been averaged over the whole year, includes such things such as a new $250 laptop, $600 of CPA license fees, video games, $2500 related to a trip to Asia, $1800 related a vacation in Vegas, lots of stuff from Amazon, and any entertainment)
Insurance - $50
Phone - $50
Total Expenses - $5,232
We just finished paying off student loans so have only had the excess for 2 months, so far this has gone to funding my Roth IRA for the year
Assets:
AMEX Savings - $5,900
Bank of America - $1,200
Capital One - $1,700
Total Liquid: $8,800
The BoA and Capital One accounts are used to pay bills and swept into investment accounts if we have more than $1k at the end of the month - thus far we haven't had enough to start a taxable account yet
My 401k - 40K
Wife 401k - 12K
My Roth IRA - 19K
Wife Roth IRA - 5.3K
My IRA (converted from pension) - 6.7K
HSA - 4.2K
Total Retirement: $87,200
All invested in index funds (95/5 split right now, will add more as we age)
Car - 2001 CRV, 2014 CRV, I would guess 4K and 24K, respectively
House: $298K from last refinance we did two months ago
Total Assets: $422,000
Liabilities:
Honda loan - $30,500
Mortgage - $230,000
Total Liabilities: $260,500
Specific Questions:
1) I know I need a lot of face punches in relation to monthly spending - first, groceries, we shop a lot of our meat/eggs from farmer's markets, so expenses are pretty high for groceries, the rest we get from Kroger. Any advice on cutting into this besides eating less meat and shopping at Costco? We pack our lunches, but I think because we include a protein with each meal, it inflates our grocery bill quite a lot.
2) Also need to cut out the eating out, and I anticipate that to fall as time goes especially once we have our child. But currently this is the only way we spend time with our friends (they are still in the go out to bars and concerts phase, which costs even more money) - any ideas here?
3) The auto bothers me, but baby steps - wife had a 51K BMW X3 when we first met (we met 3 years ago) and I convinced her to "downgrade" to a 30K Honda CRV. I'm trying to work on this but will probably wait another year before broaching the subject since she just switched a few months ago (she also has promised to drive this car until it explodes). Any advice?
4) Not much we can do about gas unless my wife gets another job. I live close enough to work that I can bike, she has to drive for 30-45 min each way (we live in Texas, where spending on highways outpaces that on education) - is her $70K a year salary justification for the gas/daycare fees we'll have to pay soon?
5) We are trying to get to FI by the time we're 40, I believe if we save $40K a year, we'll get there - anticipated retirement spending will be $60K a year (extravagant I know, but only to account for unknowns - kids, if we decide we want to slow travel, etc.). Is my evaluation possible?
6) We're canceling the TV after Christmas, as our families will be staying with us over the holidays and so we'll stick with the program until then
7) Any general advice for further optimizing our lives? I know we have a ways to go, but figured this would be a good starting point?
Thanks again to all who will deliver tips and some much needed face punches