Hello all,
I am 31 and my husband is 28. We only buy bare necessities and are actually in the middle of de-cluttering our life as well. We do not have children and do not plan to have any for about 5-8 years. Ideally, we'd like to have one child right before retiring. We know the world is open to us and I think our main problem is we have too many choices (never a bad thing!) and are not sure which ones will get us to the goal faster. When we retire we are sure we do not want to live in Florida so right now our owning the home is up in the air. We could pay it off then move and rent it out for $1300+ easy or sell it and buy something smaller/cheaper. We've looked into renting right now if we sell the home, but we would pay more in rent than we do in mortgage because of our dog. We can't find something cheaper that accepts pets. In addition, right now renting is not an option as the HOA has restricted the community from renting until more owners live there.
Here are our stats:
Income: wife - 51,552
husband - 47,372
SUBTOTAL: $98,924
Current expenses:
Mortgage: $960 - includes taxes/insurance/PMI
HOA - $162
Roth IRA for Husband: $200
Cell phones: Just switched to Republic from AT&T - $0 since husbands job pays $50/month. Once we retire, we incur this expense.
Internet (wife teleworks one day a week) - 33.00
Electricity - $80/month all year round. We live in S. Florida and are on a program called Budget Billing, where they take the average of what you pay over 12 months and have you pay that so you don't have drastically different bills when the summer months begin (which is 9 months out of the year, if not more). We are in the process of installing LED bulbs in our living areas, where most electricity consumption takes place.
Mother's AARP Life Insurance - $68/month for a 15k policy
Car insurance - $124 (GEICO, no collision or comprehensive coverage, bare min. amounts)
SunPass (pays for tolls, not used for commuting but for occasionally visiting family that lives 30 minutes away) - $5/mo
Rdio - an app - $10
Gas for 2 cars (one is an 04 Honda Civic the other is a 99 Jeep Grand Cherokee, both owned outright) - we budget $260 a month, but we started to carpool in the Honda more days and use the Jeep less. Considering selling Jeep in the future. We both work in the same vicinity, 10 minutes away from home. Biking to work is just not an option right now as I fear for my life just driving to work, never mind being on a bike.
Food - $500 (we are vegan and also shop at Costco up to 2x a month) We don't always use it all, and we also use this money if we eat out (1x a week or less)
Water - $50
Expenses (Entertainment/items needed from drug stores, etc) - $75
Therapy - $50/month
Dog food - $50/mo
Vacations: 2 vacations to Gatlinburg TN (driven) - $1600/year for about 3 weeks of vacation - $133/month
SUBTOTAL: $2,810.00
Expected ER expenses:
One child - Not much since we won't have to enroll him/her in daycare and we are pretty frugal in general
Health Insurance - I suspect this balances out with what we are paying now, pretax - $400/monthly for dental/health/vision.
1 car - insurance $62
Gas - considering electric car
Cell phones - $50
Own home outright - would pay $510 monthly (taxes+insurance+HOA+utilities) If we rent it and live somewhere else this would be taken care of plus $700+ profit each month.
Food - $400
Dog food - $50
SUBTOTAL - $1522
Assets:
TSP (gov't) retirement account - wife - $33k in a Lifecycle2040 fund (10% of pay every 2 weeks, plus 5% employer matching)
Husband - BlackRock Roth - $4k (currently in the process of either rolling over to a Vanguard Roth or trying to put this money into low index funds)
Savings - $12k (Emergency fund in case one of us loses our job for max of 6 months) (regular money market, about to open a Cap1 360 savings acct)
SUBTOTAL: $49k
Liabilities: Mortgage - owe $112.8k at 4.25% interest - 30 year note, 28 years left (3/2.5 bath townhome, 1598 sq.ft. - bought at 123.5. Value = 140-150k)
SUBTOTAL: $112.8k
Specific Question(s): We would like to know (1) if there is anything else we can cut from our spending and (2) if our anticipated strategy of paying down our mortgage *and* starting to invest in Vanguard index funds is the best one if we want to retire in 8-10 years.
Thanks for any ideas/suggestions/help.