Hello! I've been a reader around here for....well, a long time. A couple of years at least. I have seen the great feedback you guys give, ad I would really appreciate it if you could take a look at my situation. And I apologize for the length; I tried to keep it readable, but I didn't want to leave anything out.
Income:
Me: $3,700
Him: $2,400
= $6,100 take home (health insurance, pensions, 457b taken out pretax)
$150-300 irregular income (bookkeeping side hustle) – always goes directly to credit card debt, in addition to payments below
Current expenses:
Mortgage 1: $1,355 (includes property taxes and homeowners insurance)
Mortgage 2: $257.90 minimum payment, we pay $400 total in order to have it paid off prior to the balloon payment coming due in 2021
Credit card 1: $550
Credit card 2: $450
Heat: $110
Electric: $70
Water/sewer/garbage: $80
Daycare: $1,100 (one child full-time, one afterschool)
Auto insurance: $100
Phones: $43
Internet: $24
Netflix: $18
Student loan: $82
Food: $700
Fuel: $240
Household: $100 (Laundry detergent, pet food, etc.)
Tools: $100 (mr. is a mechanic, still building up his tool collection)
Frivolous: $278 - some entertainment, some eating out, some vice-related (liquor store, smoking)
Savings for car replacement: $300 (cars are 15 and 18 years old, replacing at least one will be a necessity in the next year or two and I want to pay cash)
Assets:
House: $223,000
Car 1: $4000
Car 2: $1000
Retirement savings (balance of pensions and 457b): $80,000
Emergency fund: $1000
Car replacement: $1000
Liabilities:
Mortgage 1: $171,000 (4.5%)
Mortgage 2: $21,000 (7.75%)
Credit card 1: $11,500 (part at 0% interest until 11/2015, rest at fixed 0.99%)
Credit card 2: $6,200 (0% until 5/2016)
Student loan: $8,000 (3.5%)
Ok, I know there will be a face punch for the “frivolous” category, but it’s something we’re reducing each month and directing more towards debt. The expense for smoking drives me crazy, but mr. is trying to quit. We do get a redbox and a pizza every once in a while, or have a meal out. But those are rare, and there are certainly no manicures or housecleaners in there.
Specific question:
We are paying our credit card debt off aggressively. Mr. finished school in June 2014, and since then the balance has gone down over $10,000. We used 0% offers to partially fund expenses while in school, most of the rest is a long holdover from lawyer bills due to a custody case 10+ years ago. We kept the school loans to a minimum, only took out subsidized loans. Right now we’re on track to have all credit card debt paid off by the end of 2015.
However, we have some upcoming expenses, mostly house-related. We need to replace our two porches, which are completely rotting out. We should replace our windows, but at the very least they need some significant repair due to wood rot. And we have a small house with only two bedrooms. Our kids (boy – 9, girl – 5) share a small bedroom, which is working just fine for now, but we will need more space pretty soon. We have an idea for a small, one-room addition over our existing kitchen, but really have no idea what it would cost. And our garage is falling down. We can make some repairs and make do, but longer-term we’re considering enlarging and heating the garage so mr. can do side work repairing cars at home. But, $$$.
On the personal side, I am pretty burned out, and I would love to quit my job and take a little time off from full time work (I would still work part time, but my income would definitely be reduced). This would let me be home when my kids get done with school (reducing daycare costs to $0 and letting me be more involved in what will be a challenging year school-wise for the 9 year old). I’m holding on for now, and certainly don’t intend to make any changes before the credit card debt is gone at a minimum. My 5 year old starts school in September, which will get rid of the bulk of the daycare costs and will also let me have more options in how I get to work (biking or bussing, which just don’t work while I have to drop a kid at preschool, trust me, I’ve tried to figure out a way).
So. How do I approach this? I am so, SO ready to be done with the credit card debt. It has been hanging over our heads for over a decade, and it’s a reminder of a really difficult time in our lives. But we need to do some work on our house, and while we’re fairly handy, we’re looking at a couple of large projects: replacing porches, including roof, and putting in footings since right now they’re balanced on piles of bricks, and an addition, which I don’t even know where to start. Even if we tackle these entirely ourselves, there will be expenses, and I can’t figure out if it makes sense to divert money from credit card payoff to house projects. Really, I would like a fresh set of eyes (or many sets). I think I’ve reduced our expenses pretty well, and our priorities are good. Maybe I’m just impatient, but any advice would be welcome!