Life Situation: Me, 26, DH, 27. No dependents per se, but we live with my semi-disabled brother (he has good days and bad days). We get money for his part of rent and groceries, but we do all the shopping/cooking/cleaning/etc. We’re not sure how long he will live with us- maybe as long as the next 3 years. Not sure how this will fit with wanting to have children though, as we’re currently renting a 2/1 house. We are hoping to start a family a year or two from now. We’re both inclined to the 3-4 kids range, but are completely open to the fact that reality/fertility/kids temperament/health/etc will influence this. Currently, DH works full time and is working on his masters in the field. He has 1 year down, 2 years left on the masters and licensing. He is taking over the family business in the field, and this should happen within the next 5 years. Earnings should go up substantially, once he takes over (current owner makes $175-225k/year, but works himself to the bone, so may not be quite this high). I just graduated from nursing school and am looking for a full time job currently, but we would like me to be at most part time, possibly leave the field for a couple years to be a SAHM when kids are little.
Our current goals:
1- We probably need to purchase a second car soon- like within the next 3 weeks. We’ve been borrowing from family, and they want the car back. Since DH is often gone for work (2-3 days per week) there’s no way for us to be a one car family, especially once I find a job.
2- We would like to buy a house someday. I really don’t want to have PMI, so I would like a sizeable down payment. We’re not sure yet where we will be settling (depends on DH’s work), but it is unlikely to be the city we are in now- somewhat of a real estate bubble currently, IMO.
3- We want FI. It’s unlikely we’ll truly RE, DH loves his field of work and the jobs of a few people are dependent on him continuing to run the company. We would like the freedom to take extended vacations though, and do plenty of camping and adventuring around our great state.
4- We are likely to be responsible for both sets of our parents as they encounter health crises as they age. This has already been true for my parents, although DH’s parents are younger. We have numerous siblings between us, but between disability, estrangement, substance abuse, and general inability to succeed in life, we’re who the families have got. As such, we need to not rely on my income. I've already been caretaker for 3 of the 4 parents during health crises. My parents will be okay financially, but I'm not so sure about DH's. Either way, I would be loathe to ever put them in a care home. Having worked as a caregiver in one, it is not a situation in which I would like to place a relative.
Gross Salary/Wage: Last year was $81,500
Pre-tax deductions:
SEP IRA: $16,500
tIRA: $5,500 (last year I didn’t work and we weren’t married, so I couldn’t contribute. This year I will, so this will be $11,000)
Note: I know the math doesn’t add up here to the AGI below. I don’t recall what it was, but something about how DH could only write off part of the IRA last year. We weren’t married, so he was filing singly. I didn’t have any income and didn’t qualify as a dependent because of my scholarships and loans.
AGI: $62,000
Taxes:
Federal: $9,600
State (8% income tax): $4,500
If I’m doing my math right (highly questionable) our Take Home Pay is $47,900, which is $3,991/month
Current Expenses: (this has gone down by nearly $1k/month since starting to read MMM forums. Thank you guys!)
Rent: $997
Health Insurance: $188 (not sure yet. DH is covered by employer, and we are adding me to his plan. Not yet sure how much this will cost. I am guessing $188, which is the amount paid for his monthly)
Yearly expenses, amortized (Prime, Costco, Renter’s Insurance, AAA): $32
Gas: $250-300/month
Groceries: $500
Dining out: $200 (this will be high, we’re not going out at all this month- we’ve brought this category down very far and are working to bring it down farther. I think it’ll “settle in” at about $75)
Work dinners for DH: $70 (we have him take lunch, since these aren’t important for the ‘social’ part of his contracts, but dinners are an unfortunate must. He keeps them low though- this is for 4-6 dinners/month)
Dog expenses: $30
Student loans: $107 (in October, this will increase to probably $400/month since my loans will no longer be in deferment)
Internet: $27
Utilities: $70
Coffee: $30
Variable monthly expenses: about $200-500 (This is way down from previous- marriage, honey moon, school costs, and then some consumer stupidity- probably used to be closer to 800-1000/month)
Total: $3,000-3,200/month
(This leaves a $700-900 average buffer, but in reality, this varies wildly based on monthly income. Some months are $7,000 income months, some are…. Not so much)
Expenses we will be taking on soon:
My cell phone (his is covered by employer)
Car insurance
Dental cleanings
New (to us) car.
Possibly other expenses I'm not foreseeing! Gradually taking over all expenses that my parents have provided for me, generally things on family plans like cell, car insurance, etc.
Assets:
DH SEP IRA: $15,450
DH tIRA: $5,730
Me Roth IRA: $1,640
Me non tax advantaged investments: $16,900
Cash: $11,000
Total: $50,722
Liabilities:
DH’s student loan: $7,350 @ 7%
My student loans: total: $37,750
Federal:
5,550 @ 3.86%
7450 @ 3.86%
5500 @ 4.66%
7250 @ 4.66%
6000 @ 5.00%
Private:
6000 @ 5.74% (I already paid off another $6k loan at 7.5%)
Total Liabilities: $45,100
Net worth: $10,703 according to mint using exact numbers (I rounded on 10s on a lot of these)
Questions:
1- Will we be able to afford children?! I know there’s never a good time to have kids, but I also know $45k in debt is nothing to sneeze at.
2- Where can we improve our expenses? I have some ideas, but maybe I’m blind to something.
3- Am I crazy? It feels like we’re pretty tight on the budget, but it feels like we’re not saving much in light of that. I feel a bit dead in the water.
4- Buying the new (to us) car. We would like to be under $10k for this, and are hoping to get a commuter care to bring down DH’s gas expenses. We’re thinking a Jetta or Passat TDI. My understanding is a hybrid really only saves for you on in-city driving, and DH does mainly highway, hence considering a diesel. Someone correct me if I’m wrong. (And I know everyone loves Honda Fits on the forum, but even a Jetta just feels so so small to me. I grew up with big trucks and SUVs, and it’s terrifying to barrel down the road in such a tiny vehicle.). Recommendations for a fuel efficient highway car that won’t make me feel like I’m going toward my certain death (ie, though safety is an illusion, it’s an important one for me)?
5- Any general feedback people can provide is much appreciated. I struggle a bit with investing concepts, and am doing the best I can, but DH had never even heard of an IRA until we were dating. So it’s uphill for the both of us.
Thank you all!
