Life Situation: 2 W2 income earners, about to be 2 young dependents, in the US, State + local taxes = 4.07%
Gross Salary/Wages: 180k (her, this is a new job that just started) + 130k & variable bonus of about 40k (him)
Individual amounts of each Pre-tax deductions:
2 x 401k 20,500
2 x backdoor Roth if this doesn't go away 6000
1 x family HSA 7300
1 x dependent care FSA 5000
150 every two weeks - health insurance
Other Ordinary Income: None
Qualified Dividends & Long Term Capital Gains: None significant
Rental Income, Actual Expenses, and Depreciation: None
Current expenses:
Here is what our January budget looks like:
Pet Care - 250 (3 large dogs, 6 cats, chickens, poultry)
Auto Gas - 450 (drive 25 miles one way to daycare/school with a minivan)
Groceries - 700
Maternity Fund savings - 1000 (this will later become the daycare bill for baby #2)
Water - 145 (this is usually around 90 but we have a leak somewhere outside, hoping the water company gives us back a credit, waiting on plumber to make his way out here but we turn off water to the outside right now)
Electricity - 475 - we added tons of insulation two months ago so our actual usage is about 250 but we're on a balance plan so right now just building up credit
Cell phone - 50 for two lines with Visible
Trash pickup - 150 (this is the trash for six months)
Internet/cable - 140.99 (we get rid of the cable after football season and it goes down to about 100 a month, we are extremely rural and only have one provider)
Tractor payment - 388.90 with 4k left at 0% (should be done this year)
Car payment - 200 with 23k left at 0%
Restaurants - 70 (aiming at eating out once a week tops)
Soda/alcohol - 50 (we live in a super expensive alcohol state where the cheapest bottle of wine is $10)
Child care - 1000 (this will double in the fall after maternity leave)
Subscriptions - 25 (netflix and amazon prime)
Gift sinking fund - 200
Doctor - 500 (my toddler goes to speech therapy 3x a week so we max out our OOP really early in the year)
All insurance and property tax sinking fund - 1215
Edited to add-> current expenses minus mortgage total 7k
Rest going into investments
We also have a mortgage left of 2300 a month for ten years. We stick my husband's bonus money in a side account and it just pays the mortgage every month.
Assets:
1MM in retirement funds
75k in taxable accounts
100k in IBonds
80k in 529
500k in home equity
Liabilities:
4k on tractor
23k on one car
247k on home
Specific Question(s):
1. We ended 2021 with a 33% savings rate of gross income and a 42% savings rate of net income with 401k added back to denominator. I need to bring this up to 50% for 2022. I'm going to try and pay ourselves first and hope it's possible. Our higher income is new so hoping to just
2. I would like one of us to FIRE when the mortgage is done in ten years and the other one closely after. What changes do I need to make to make this happen?
3. Any thoughts on our spending and plan?