Hello Mustachians!
I have been making steps towards FI for about a year, and my wife recently decided to jump on board! We got married last October, and we've been working on combining our finances and discussing our financial goals. We both had some credit card debt, and she had an overdue bill (about $2,500 total) that we have paid off. I have about $50,000 in student loans ranging from 3.4 to 6.8%. My wife has a similar amount of student loans, but luckily her parents are paying it off for her. I am currently working full time in HR while going back to graduate school. The total cost of the graduate program is $17,500, $10,000 of which is being paid by my employer. Normally I'd never go back to school without having other loans paid, but my out of pocket is so low, and I have the time to currently handle the workload. My wife works in marketing research, and has a side gig coaching at a local university. I've been looking into secret shopping or other flexible opportunities for side income as well. I make a little under $40,000, but should be up above it with my annual increase this year. I am pretty underpaid for my job and geography. My wife makes about $34,000.
We live in the Twin Cities in Minnesota. Great job opportunities, but cost of living is a bit higher than is ideal. The weather is also horrific (although this winter has been fairly mild). We're considering relocating to another Here's our monthly budget:
Rent: $1,150
Student Loan Min.: $450
Car Payment: $199 ($8,600 left at 7%)
Car Insurance: $50
Cell Phone $29
Groceries: $400 (utilizing AMEX blue cash preferred for 6% back on groceries, 3% on gas, paid back immediately)
Gas: $100
Toiletries, cleaning supplies: $50
Cable & Internet: $90
Utilities: 110 (gas & electric)
Entertainment, other spending: $200
TOTAL: $2,828
Monthly combined income after taxes and withholdings: $4,100
Rest is going towards paying down my student debt.
Assets we have:
- Emergency savings: $3,000 (saved in an account with .9 APY)
- 401K through vanguard in target fund: $5,500 (Employer only matches up to 4%, but I'm currently at 5%)
- HSA: $1,000 (all contributed from my employer)
- Wife's 401K: $500 (she just started, employer only matches 1% I believe, she's around 5% as well)
- I have a 2006 civic worth about $6,000, wife has a 2013 Jetta paid for by her family. Both get 30+ mpg, wife's mother pays for her insurance.
Issues:
- Our rent is a little high, just over 25%. Biggest expense by far. Renting is expensive closer to work, and commuting is terrible. We were able to rent this condo from the owner that has new appliances, building was built in 2007, has in-unit washer and dryer, and free parking and a garage spot. We're locked in until February, I negotiated this rate down to sign a 2 year lease. Anything with in-unit laundry will cost $1,000 or more in our area. Both of us are about 10 minutes from work, and 10 minutes from downtown Minneapolis, so the location is about as good as it gets as well.
- Both of our incomes are low for our area. I know that I'm being underpaid at my employer despite great work and reviews. We've been considering relocation as we both feel we can easily make as much in a lower cost area with much lower rent and COL.
- Car payment. My car was hit overnight a year ago and completely totaled during a wonderful MN snowstorm. Car was only worth $2,000, but paid off. I'm glad I got a good mileage vehicle, but I got killed on the payment. I've looked into refinancing, but the extra months would cost more than sitting through the 3 years left.
- Cable. We originally had no cable, but once our internet shot up to $90 after a year, it cost just as much for cable and internet through Comcast. My wife cares for cable much more than me, but we have free access to Netflix and Amazon Prime that our parents graciously allow us to use. I have a friend willing to sell me a chromecast for $15, so we likely will cut this again and go with just internet.
- COL and weather in MN. Although I've lived here forever, I despise snow and winter. Having moved to the largest metro area makes it worse with commuting. It adds additional stress to our lives, and it is constantly busy and backed up during working hours, and going other places always takes a long time. Moving south to a place that is cheaper and warmer sounds nice, but is it worth giving up great employment prospects for and being away from family?
Right now, assuming no significant pay increases or cost reductions, I'll be debt free by about age 29. We really would like FIRE, so I'd like to get out of debt in about 2 years if possible. What do you Mustachians suggest? Do things look good? Should we consider moving? Do we need to put more into our 401Ks?
EDIT: Undergraduate loan breakdown as requested:
Subsidized:
$620.03 5.6% Fixed
$1,494.38 3.4% Fixed
Unsub:
$4,040.08 7.25% Fixed
$1,716.78 7.25% Fixed
$5,863.32 6.8% Fixed
$7,602.62 6.8% Fixed
$7,511.43 6.8% Fixed
$5,243.64 5.75% Fixed
$2,670.78 3.2% variable
$1,478.77 3.2% variable
$2,146.37 3.2% variable
$1,735.13 3.2% variable