Topic Title: Case Study
Life Situation: 26m/25f, married filing jointly, no dependents (yet), NC, USA.
Gross Salary/Wages: $7,725 (per month)
Him: $4,455
Her: $3,270
Pre-tax deductions:
401k’s (both 10% contribution):
• Him: $444 (+5% match)
• Her: 327 (+3% match)
Pension: (mandatory ~6%)
• Him: $268
Medical:
• Him: $80
• Her: On parents family medical until 26 YOA then will enroll in employer health plan.
Other Ordinary Income:
His side hustle: ~$1,000 (10-99 taxes)
Her side hustle: ~$500 (10-99 taxes)
Qualified Dividends & Long Term Capital Gains: n/a
Rental Income, Actual Expenses, and Depreciation: n/a
Adjusted Gross Income: $6,606
Taxes: (Tax return this year was $2,200 after the taxes for side hustles were taken out. I did not include the side hustles taxes because we do not pay them monthly.)
Him: $896
Her: $776
AGI – Taxes:
=$4918 + $1,500 (side hustles) = $6,418 (take home)
Current expenses:
Rent/Mortgage: $0 (rent is currently compensated for living on site of current apartment complex, this perk is associated with primary job)
Energy: $80
Cell Phones: $100
Cable/Internet: $123 (apartment complex has a contract with a cable company for this rate, everyone living in the community has to pay this monthly)
Water: $40
Groceries: $300
Restaurants/Alcohol: $200
Fuel/Maintenance: $125
Car Payment: $189
Auto Insurance: $116
Auto Property Taxes: $40
His Personal: $50
Her Personal: $50
Vacations/Weddings: $200
Gifts/Christmas: $100
Life Insurance: $16
Everything Else: $200 (pet, home/personal supplies, dry cleaning, medical co-pays, work items, haircuts, clothes misc. etc.)
Total: $1,929 + Roth IRA Contributions ($920 to max) = $2,849
$6,418 (take home) - $2,849 (expenses) = $3,569 savings
Assets:
Cash: $28,000
His 401k: $35,000
Her 401k: Just set up last month
His Roth IRA: $7,000 (started 2015)
Her Roth IRA: $3,000 (started 2016)
2012 Toyota: ~$25,000 (paid off)
2016 Hyundai: ~$28,000
Liabilities:
Hyundai Auto Loan: $10,500 @1.8%
Net Worth: ~$58,000
Specific Question(s):
We currently keep $3,000 in our checking account to send out for bills. Majority of our monthly expenses are put on credit cards and paid off in full each month to churn those rewards. That leaves us at $25,000 in savings right now. The $3,000 in checking is what I consider to be our emergency fund (+withdrawing from IRA’s if really needed, will probably increase cash emergency fund once we have a house).
Our primary goal right now is a down payment for a house. We are looking at purchasing in the $200-250k range. Our goal is 20% down payment plus more for renovations, furnishing, closing costs, etc. The goal we are trying to get to is $60k.
We have $35k to go. At $3,500 savings/month we are 10 months away from our goal. I have also considered selling my truck to buy a cheaper/fuel efficient car to put additional towards our down payment.
We should have our house down payment goal and be debt free in the next 13 months. After that the focus will be primarily on retirement savings. We currently max our Roth’s and will be aiming to max those 401k’s next.
This is our story, thank you for reading! I’m sure I left some info out but I can answer any questions! Please let me know what you think!