Hello! I have been scouring over MMM posts for the last several months and decided it was time to post a case study in hopes of getting some advice on our current situation.
Background: We are currently 37 and 38 years old. Married with two boys (8 and 5). I have been a SAHM for 8 years and would like to continue to SAH for the next few years. I am very involved and school and other organizations and my husband and I like the flexibility that my being home allows when it comes to sick kids/school breaks/snow days/summer, etc. So our future planning doesn't include me going back to work. It may or may not happen at some point.
We have always been fairly frugal but have lacked direction and organization to buckle down and really save. Moving forward we would like to really focus on trying to save and have the ability to FIRE somewhere in the 50-60 range. DH actually loves his job but works crazy odd hours and we'd love for him to have the ability to go part-time or consult in the next 10-20 years.
Income
Gross - 122K/year
Net - 6k per month (after 12% to 401k - employer does not match but dumps 7-10% in 401K annually as profit sharing)
Expenses
2038 - PITI (17 years left on 20 yr. at 3.25%)
75 - life insurance (500K on him, 250K on me)
85 - auto insurance (2 vehicles)
23 - YMCA membership
210 - gas/electric (budget billing)
130 - cable/internet
180 - verizon - 2 cells with data plan
70 - water/sewer/garbage
100 - charity
150 - student loan (1800 remaining, 2.9%)
700-800 - groceries/household items (I really need to get this down)
200 - dining out/entertainment
150 - gas
50 - medical (copays, medicine, etc)
100 - kids activities (sports)
50 - clothes
4361.00 TOTAL per month
Assets
Home - value 275k
2003 Toyota Camry (paid off, 110K miles - no intention of replacing anytime soon - add only about 4-5k miles per year)
2008 Toyota Highlander (paid off, 95k miles - no intention of replacing anytime soon - add only about 5-8k miles per year)
401K - 250K
Cash Savings - 8k
Liabilities
Mortgage - 215k owed (17 years left on 20 year)
Student loan - 1,800 at 2.9%
Looks like about $1,500 per month extra. We have been using this money the last couple of years to pay for some housing expenses (siding and a few other things) and braces/orthodontia for me. Those expenses are gone....so we really want to be purposeful in how we go about using that money.
Some key points:
- We are kicking ourselves for doing the 20 year vs. 30 year mortgage. The payment is a little tighter that we prefer and have contemplated refinancing again...but always talk ourselves out of it because we do NOT want to start over with a 30 year term.
- We need to save more cash. We have some windows that need replaced (4k), gutters (900) and some other random things in our house...not to mention emergencies.
I know that we can make some cuts to our expenses to help the situation. Would love some feedback there. So should we divert the extra money every month to our savings account for now? Increase our 401K to max? We are just not sure exactly where to go from here. We both want to the student loan gone.....but we don't want to take any more from our already low savings account.