Hello all! It's been a little over a year since my first post and we've made lots of changes, mostly in the right direction. I wanted to share our progress with everyone that offered such great advice.
Life Updates! WeddingWe got married in July and spent about $4000 on the wedding. We received about $10,000 in various cash gifts + gift cards (we requested Home Depot specifically), almost all of which has gone into the house.
SchoolI switched to a new (better) company in April, so I got a $10k pay bump but company no longer paying for a Masters. I determined that a Masters degree wasn’t necessary for where I want to go in my career and the degree was not worth taking a significantly lower salary. If I change my mind, I can go back, but I was essentially paying $50k in reduced income (5-year commitment to old company at $10k under market salary) for a degree that only cost $25k.
Husband has also decided not to get his degree. The winds are changing in tech and it’s clear that a degree is less and less necessary and he just has no interest in going back to school at this point.
HouseWe have been doing a lot of work on the house. We ripped out all our grass in the front yard and put in a vegetable garden with drip irrigation. It’s been a lot of fun and water costs are minimal, but even with DIYing it all ourselves, it still cost $3-4k in materials and equipment rental.
Currently, we are in the middle of a remodel of our living room. When we first moved in, we had removed the popcorn ceiling ourselves, only to discover how sorry the plasterwork underneath looked from different additions. There were also no hardwood floors in part of the area we removed carpet, just pieces of plywood. We hired a GC to do the work we were not comfortable with (adding new floorboards and sanding/staining the whole living room to match, removing plaster and putting in new drywall, some detailed repair work, removing and replacing old insulation, installing solar and grounding our new electrical panel). The rest we are doing ourselves (re-wiring the whole house and moving to a new panel, installing recessed lighting, painting, base boards).
Future renovations include: tankless water heater (replace a 10 year old tank heater), stucco repair, new kitchen (big overhaul – mix of cosmetic and functional, but focus on less expensive finishes/cabinets and focus on functional improvements), bathroom cosmetic refreshes (resurface tub/shower, re-grout shower tile, new paint and light fixture, rearrange towel rack and hardware placements to make space more functional.). Anticipating $40k in additional renovations over the next 3-4 years. Definitely want most major issues fixed before kids.
We also plan to refi this or next month after renovations – house will be re-appraised, hopefully to at least $530k, which means no PMI and we’ll be at 75% LTV which will give better pricing. We expect new mortgage payment to be $1850/mo and we’ll still be paying $2275 since we’re used to it + a 13th payment each year.
Family/Future HousingWe plan to start trying for kids in about 5 years when I turn 30. Our moms have offered to help with child care, so we will be staying in this area for the foreseeable future. We like our neighborhood more and more and plan to be here for a very long time; it has plenty of space for a couple tots and the schools/amenities nearby are fine.
We found out recently that we will be inheriting my husband’s family home when his aunt passes away. So we’ve decided to stay put in this house for next 10-20 years until that point. Husband would very much like to pay off the house before then, so we are looking at a 15 year pay off. I know there is a big discussion in this forum about not paying off mortgage, but husband is naturally spendy, so any savings that motivates him is good in my book, especially since we’re still saving $2850/mo towards retirement. If we play our cards right, we can move into paid for family home, sell this home and invest the equity with our retirement savings, and FIRE in our 40s/early 50s.
Gross Income:Me:
$70,000 - base salary
$5,000 - bonus
$2,000 - YouTube channel
Total:
$77,000 (+$18k since last November)Him:
$70,000 - base pay (hourly at $33/hour)
$5,000 - estimated OT
$3,000 - minor side hustles
Total:
$78,000 (+$15k since last November)Rental income:
$7500 – (was renting bedroom to a friend for $500/mo, she just moved out in November. We’ll be renting again in January for $650-700/mo)
Total for both:
$162,500 (+$40k since last November)Deductions (Pre and Post Tax):Me:
401k: $875/mo (16% of gross)
Roth IRA: $500/mo (maxed)
Health/dental insurance: $0 (on partner’s)
Him:
Pension: $350-450/mo
403b: $600/month (+$500 since last November)
Roth IRA: $500/mo (maxed)
Health/dental insurance: $0 (fully employer paid)
Monthly retirement savings: $2875/mo ($34,500/year)
Monthly SnapshotMonthly take home: $7500-$8500 (variable based on husband’s OT and whether we have renter in room)
Mortgage + PMI: $2275.00 ($275 is extra on principal, $2000 for P+I+PMI)
Taxes & Home Insurance: $600
Electric/Water/Sewer/Trash: $150 (Paid every 2 months, varies based on season. Will go down when solar kicks in)
Solar loan: $100
Gas for house: $25 (average)
Internet: $130 (promotion period ended, in an ISP monopoly area)
Cell Phone: $100
Car Insurance: $70 (one car, two drivers, liability only. Rates went up since last year, but we got a marriage discount)
Netflix/Hulu: $25
Apple Music/Spotify: $25
Groceries/Toiletries/Pet Food: $300
Entertainment/Eating Out: $400 (increased – husband was unhappy and was causing too many fights. Not worth the headache)
Gas for Car: $100
Misc (Car Maintenance, Haircuts, etc): $400 (increased)
Travel: $300 (started saving for this explicitly – we do a big 10 day international trip every year)
Renovations/Solar Loan payoff: $1200 (currently putting aside for renovations, switch to solar loan pay off in January, switch back to renovations when loan is paid off)
Total Expenses: ~$6100.00/mo + $1000/mo in Roth IRA. Any remainder is thrown into emergency fund for most immediate upcoming goal.
Assets:House: $505,000 (this is Oct 2018 purchase price)
EF/Cash: $24,250 (this holds several mini “funds” - $17,250 for e-fund, $1,750 for travel, $500 for dental work for husband, $4800 for renovations)
My 401k: $31,850
My Roth IRA: $18,000
His retirement accounts (combo of Roth, 403b, pension cash value): $44,000
Total: $623,100
(+$72k since last November)
Liabilities:Mortgage: $397,000 @ 4.125% (refi’d to lower interest rate, will refi again in Dec/Jan to hopefully 3.5-3.625%)
Solar loan: $21,450 @ 5% (will get about $8200 in solar tax credit + insulation credit that will get thrown at this. Plan to pay off remainder by summer)
Remaining due to contractor: $7700
Total: $425,700
(+$15k since last November)Net Worth: $197,400
(+$55k since last November, but includes cash value of pension that I hadn't previously included)The 2020 Plan- Get new renter at $650-700/mo
- Do our 13th mortgage payment for the year
- Pay off solar loan
- Increase EF to $20,000
- Save and pay cash for smaller home updates (replace 10 year old water heater with tankless, repair stucco, cosmetic refresh of bathrooms) – approx. $6000
- Husband gets annual raise in July, I will likely get one in next year or two. We’ve agreed to split increase evenly between increasing 401k contributions and adding to mortgage payoff to avoid lifestyle creep.