Your average cash outflow in a month is $6,388, but your income will be going down to about $4,134. That means you need to cut about $2,300/month out of your budget.
How's this sound?
Fixed:
Mortgage, inc PITI (residence): $551
Mortgage, inc PITI (rental): $393
Health Insurance: $131
Student Loans: $227
Auto Insurance: $106
Internet: $35
Retirement Savings:
$963 $500529 savings: $50 As others have mentioned, your future income should be able to cover college expenses.
Taxes withheld (fed, state, local):
$1,335 $300 Your federal income tax should dip down to about zero (or possibly even negative) when you're in school. Your education tax credits and child tax credit should basically cancel out the tax on $50k AGI for a married couple with one kid. This $300 figure includes $250 for your wife's Social Security/Medicare tax, plus a bit more for state/local taxes (assuming these go down quite a lot as well).
Daycare: $602
subtotal:
$4,393 $2,845Standard Variable: (this is what we've spent on average for last 12 months pulling from Mint for typical expenditures)
Groceries:
$487 $270 Aim for
$1 per person per mealRestaurants:
$134 $60 You won't have time to eat out much when you're in med school anyway.
Utilities:
$234 $200 Be more efficient here. Can you change the thermostat by a couple degrees? Use the dryer less? Take shorter showers? Downsize your trash can?
Cell phones:
$146 $30 Your wife can use her work phone and you can sign up for a low-cost carrier for yourself.
Gasoline:
$193 $353 Assuming an additional 400 miles/week of driving, with $4/gallon gasoline in a 40 mpg vehicle (you do have a fuel-efficient car for all this driving you're about to do, right?)
subtotal:
$1,194 $913Variable variable: (this is the 'average' monthly expense from last year but most of these, e.g. travel, aren't regular monthly expenditures)
Home improvement/furnishings/lawn&garden:
$114 $20 Fix stuff when it breaks, spend no other money on "home improvement" for now.
Alcohol/bars, fast food, convenience stores, coffee shops:
$78 $20 The hectic schedule of being a student and parent all at the same time will likely cause you to slip and buy fast food once in a while, but try to minimize this.
Kids activities/supplies: $41
Travel:
$280 $140 (includes
two trips one trip to Mexico to visit family)
Shopping/clothing/books:
$154 $50 Never go "shopping" without a particular needed item in mind.
Doctor visits/contacts/pharmacy: $82
Race entries/sporting goods/bike stuff:
$52 $10 Stop entering races, run and bike for free on your own. The $10 is for replacing broken equipment only.
subtotal:
$801 $363Total Monthly expenses:
$6,388 $4,121This puts you a whopping $13/month below your target, and still budgets $500/month for retirement savings. You can push this lower if you really need to, but I would be hesitant to do so. Tax-advantaged savings is a good thing that you don't want to waste.