Hi Everyone,
I am new to the MMM community, but my brother is a big fan so I figured it would be good for me to join. Currently I am at a time where I am trying to figure out what the next move is for my young family’s finances.
Life Situation – Married filing jointly. My wife and I are both 26. We welcomed our 1st child back in January, so our child is now 2 months old. I am a civil engineer working for an engineering consulting firm and my wife is a teacher. We live in an apartment in Northeastern Kentucky.
Goals:
- Figure out what the best financial move is for our family moving forward.
- Find ways to be more cost effective as a family.
- Make financial decisions that will help us prepare for the future.
Gross Salaries:
Wife - $37K – 2nd year of teaching, but salary will increase to $42K next year because of some completed Masters courses.
Me - $76K – 4th year working for engineering consulting firm.
Monthly Expenses:
Rent - $945 (some utilities included)
Electric - $120
Cable & Wifi - $154
Cellphone - $160
Car Payment - $260 (2017 Honda CR-V; $14,097 financed; total of $15,500 will be paid over 60 payments)
Car Insurance - $75 (currently pay in two amounts every 6 months)
Gas for Cars - $100
Food - $500
Entertainment/Miscellaneous - $200
Dog - $70
Daycare - $400 (currently not using, but will start in mid-April)
Total – approximately $3,000
Assets:
HSA - $70 (just finished paying for child birth expenses; approximately $70 taken from bi-weekly paycheck)
Checking - $2,774.77 (used for paying bills)
Savings - $2,169.67 (small emergency fund for easy access)
Ally Online Savings - $13,339.11
401K - $28,566.38 (6% of bi-weekly paycheck to Traditional IRA, 6% of bi-weekly paycheck to Roth IRA)
Cars – approximately $26,000 (2008 Honda Accord-paid-off; 2017 Honda CR-V paying monthly)
Total (excluding cars) - $46,909.93
Liabilities:
2017 Honda CR-V – currently on a 60-month payment plan; $14,097 financed with a total payment of $15,597 over 60-months
Future Plans/Thoughts:
- We just had our 1st child but definitely would like more children in the future if we are lucky. My wife and I would like to have between 3-5 children.
- We would like to move closer to family in Central/Northwest Ohio in the next year or so. During this move we would like to buy our first (starter) home if possible. Would like to have 15% to 20% down payment, if possible.
- Within the next 3-5 years we would like to replace the 2008 Honda Accord. Currently at 167,000 miles and would like to reach over 200,000 miles before getting a new (used) car.
- Would like to start college/general savings for kid(s) as soon as possible.
Specific Questions:
1) Should we just continue to try to save as much as we can to build a good down payment for future house?
2) Would now be a good time to buy into the stock market (mutual funds) to help start a college/general savings for our kid(s)? We know that the stock market is currently suffering from the Coronavirus, so I thought it may be a good time to buy low in order to maximize our future potential profit. We would go with the “buy and hold” technique of mutual funds to provide a savings for kids. Looking into VTSAX ($3,000 minimum buy-in), but open to any suggestions.
3) Should we use a big chunk of our Ally Savings to finish paying off our 2017 Honda CR-V car payment? I know this would be a big hit to our current savings, but it would take away our debt and let us put all of our money (excluding monthly expenses) towards saving or mutual funds.
Ultimately we are trying to figure out what the best move is for our young family. Part of me wants to try to take advantage of the low-value of the stock market, but I also know that it would be good to pay-off the car to help us maximize our saving. It seems like we have some good options for our next move financially as a family, so I am open to any and all suggestions. We just want to do what is best for us, and maximize our finances. Thanks for taking the time to read this post and I look forward to hearing your responses. Feel free to ask any questions and I will answer them to the best of my abilities.