Life Situation: I am married with one baby on the way and another in the future plans. I am a lawyer at a mid-sized firm in a mid-sized city in the Midwest (I am also of average height and weight). We will be adjusting to one income after the birth of our first child in late August. I'm concerned this will throw off my career plans, which involve giving up the 55 hr/wk grind in my mid 40s. I am rapidly approaching 30 right around the time the baby comes.
Gross Salary/Wages: $120,000
Pre-tax deductions: 401k - $18,000
FSA - $1,500
INS - $6,144
PARK - $1,680
Other Ordinary Income: Only about $200 from bank account interest; except that I get a bonus around Christmas time which has been as low as $1,000 and as high as $30,000. I anticipate about $20,000 this year, but it is entirely at the discretion/whim of our managing partner.
Adjusted Gross Income: $92,676
Current expenses (for one income):
Income $73,212.00 $6,101.00 (after taxes and other withholding)
Restaurants $3,000.00 $250.00 (I kind of hope that the hassle of taking a baby to a restaurant helps tame this)
Car $3,475.00 $289.58 (commute in 2004 Mazda6 station wagon - 15 mile round trip)
Parking $1,680.00 $140.00 (cheapest lease in town by far)
Student Loans $13,800.00 $1,150.00 (could divert up to $500/month elsewhere)
Mortgage Pmnt and Int $12,936.00 $1,078.00
PMI & Escrow Fluff $2,556.00 $213.00
Taxes and Insurance $5,700.00 $475.00
Groceries $6,600.00 $550.00 (lumps in some other things like pet expenses and diapers - I hope)
Utilities $5,232.00 $436.00 ($80 phone; $78 internet; $100 electric; $100 gas; $48 water; $30 trash
Charity $500.00 $41.67
Shopping $4,200.00 $350.00
Car Payment $0.00 $0.00
Dues $0.00 $0.00
Services $500.00 $41.67 (vet bills for 2 cats and two dogs; may not actually be this much)
Home Improv $2,000.00 $166.67
Major Purchase $2,000.00 $166.67
ROTH IRA $0.00 $0.00
Insurance $2,600.00 $216.67
Vacation $2,500.00 $208.33
Savings $10,900.00 $908.33
Extra $3,921.00 $326.75 (surplus/discretionary... not extra spending)
Total Mortgage = $1,766/month
Total Debt payments = $1,150/month
Total other = $2,857/month
Discretionary = $326/month
Assets: ROTH IRA - $47,000
401k - $90,000
Taxable - $24,000 (in savings account as an emergency fund)
I have a three-fund portfolio with Vanguard, as you may see described in the Bogleheads website.
Liabilities: Student loans (goal is to nix these in 7 more years; total current payment is $1,150 monthly):
$36,000 @ variable 2.57% currently paying $253/month
$17,000 @ fixed 5.5% currently paying $261/month ($143 required and $118 extra)
$13,000 @ variable 2.87% currently paying $461/month ($85 required and $376 extra; in default due to co-debtor bankruptcy; trying to fully pay off before co-debtor stay expires so I don't get sued)
$1000 @ fixed 3.66% currently paying $25/month
$18,000 @ fixed 3.66% currently paying $150/month
Ideally, I would like to squeeze about $3,600 more out of this budget to put in my ROTH. The "extra" line at the bottom theoretically covers it, but every month it seems like there is some $200 BS thing that falls in my lap. So what is the low-hanging fruit that you would pick? What radical changes would you make to push me closer to being able to retire in 15 years? I think I need about $1 million, and I need to get rid of my debt before then. Also, what steps should I take to help prevent a baby girl from busting the budget? I have $5k set aside already to defray whatever she's going to throw my way.
Feel free to offer any other comments.