Life Situation: Married with a 2 month old son. My wife is a stay-at-home mom, at least for a while. I'm 27 years old, she is 32. We live in NW Indiana, about 25 miles from downtown Chicago. Bought our first home in May 2016.
Gross Salary/Wages: $70,000 annually, $5832 monthly
Pre-tax deductions: 401k: Contributing 6% of my pay = $350 monthly. If I contribute 6%, my employer matches 5% ($334/month) and all employer contributions are 100% vested immediately.
FSA: $60 monthly
Medical/Dental/Vision: $525 monthly
Train Pass:$183 monthly
Total: $1118/month
Taxes: Federal: $550/month
State: $184/month
County: $72/month tate/local, and FICA.
Medicare/Social Security: $402/monthly
Total: $1208/monthly
Take Home Pay: $3506/month
Current expenses (all figures monthly): Mortgage: $945 (30 year loan with $165k balance. Currently principal ($248), interest ($532), escrow ($162))
Groceries: $400
Car Insurance: $54
Home Gas/Electricity: $86
Water/Trash/Sewer: $72
Gas: $200
Charity (non-negotiable...we are Christians and we believe in tithing): $370
Internet: $44
Cell Phones: $150 (once we finish paying for our phones, this will be $100 monthly for unlimited everything with T-Mobile)
Medicine/Vitamins: $70 (my wife has Crohn's disease and gets her medicine in bulk)
Entertainment: $100
Misc: $125
Total: $2616Take Home Pay: $3506/monthTotal Monthly Expenses: $2616Potential Monthly Savings: $890Assets: Retirement Accounts: I currently have $10k in my 401k and my wife has ~$5200 in her 403b from when she was working at a non-profit.
Savings: $5500
Vehicles (not sure that it is properly Mustachian to refer to vehicles as assets, but what the heck...): My wife drives a 2005 Subaru Outback (worth ~$4000), used to drive it 15-20k miles per year, probably much less now that she does not commute 15 miles each way to work. I drive a 99 Corolla (manual trans of course, worth ~$1000). I drive it 12 miles every day to the train, about 3k miles per year.
Liabilities: Our only debt is our mortgage. Originally $166k for 30 years at 3.875%; current balance is $164,500 (only had the house for about 5 months). Monthly payment is $945. Interest/Principal/Escrow amounts are detailed above.
Specific Question(s):
- I'm having a tough time figuring out ways to increase our monthly savings. My wife may start working part time in 6-12 months, and if she does all of her income will go directly to savings or the mortgage. Do you see anywhere we may be able to cut expenses and improve our savings?
- What's best? Put more towards the 401k, start investing in index funds via Betterment (or something similar), or put everything extra towards the mortgage?
Thanks for your help, please let me know if anything above is unclear. We are brand new to this journey but are excited to take on the challenge and see our stash build up!