Fellow Mustachians,
Here is my case study request. Rip it apart to shreds as needed. I am open to criticism.
Life Situation:
IRS Filing Status: MFJ (His age: 33, Her age: 29.5)
Dependents: 1 (Age: 2 yrs)
State of Residence: California
Gross Salary/Wages: $14583 per month (35000 per year bonus split into 2 payments once in April and once in October. Only had this kind of income since May 2016) (Her: 0 - Wife is a stay at home mom)
Pre-tax deductions:
401k: $2625 per month (This will max out before the year end anyway)
HSA: 0 (Plan to sign up in HSA starting Jan 2017)
FSA: 0
IRA: 0
Insurance: $264 per month (Includes dental+Vision for the 3 of us) (If I take HSA, then I move to a HD plan so premiums will be very low)
Other Ordinary Income:0
Qualified Dividends & Long Term Capital Gains: 0
Rental Income, Actual Expenses, and Depreciation: 0
Adjusted Gross Income: $14611 per month
Taxes:
Federal, state/local, and FICA: $3800 per month (Close approximation)
Current expenses: All expenses per month
Mortgage (P+I): $1680.50
Property Tax: $440
HO Insurance: $40
HOA: $313
Car Lease: $123 (Leased an EV for commute). Lease ends May 2019
Auto Loan: $0 (no auto loan)
Credit card debt: $0
Internet: $50
Phone bill: $50 (2 cell phones on Project Fi)
Software: $10
Home Entertainment: $35 (HBO Now, Netflix, Sling TV to watch Spanish league Soccer)
Movies: $0 (We don't go to the cinema. Wait till they show up on Netflix or HBO)
Games: $20 (This is the high end. We play a lot of board games. So I buy a game every other month or so. But this is close to the monthly average)
Eating out: $110 (Includes my lunch at work of $2.86 20 days a month and us eating out. We don't eat out that much)
Child Expenses: $200 (I almost never hit this amount but put this aside anyway)
Child pre-school: $600 (My wife is a stay at home mom. But we plan to send the LO to pre-school starting August so she can socialize with other kids. We'll probably send for a year or so and the stop)
Electricity: $40
Gas: $40 (My other car that my wife drives needs filling up about once a month. $40 is on the high end)
Travel: $200 (We love traveling. We take one big road trip each year)
Parents: $400 (I take care of my parents. Not backing down on this one)
Groceries: $250
Trash Service: $23
Car insurance: $167 (For 2 cars and 2 drivers. I feel this is a bit high. What do you think? I am with AAA)
Monthly Investment: $1000 (each month in vanguard)
Funny Money: $200 (Worst case scenario)
Expected ER expenses: $2100 per month (I initially thought ER meant emergency so gave a different number :)) COrrected it now.
Assets:
Employer 401(k): $130,000 invested in vanguard index funds
Taxable investments: $10,600 in Wealthfront, $40,000 in Vanguard 500 Admiral
Townhome: $440,000 (Last appraised in Jan 2016) (Have 20% equity)
Liabilities:
Mortgage Principal: $352,000
Original term: 360 months
APR: 4%
Months left: 354 months
My expenses have been like this for the past 2.5 years or so. I used to pay rent and now I pay mortgage.
Specific Question(s):
1. What am I doing wrong here?
2. Do you see any room for optimization and improvement?
3. What should my investments look like? Any suggestions?
5. When can I be FI?
4. I may have more questions that I will ask as I get to them.
Thanks.