Hi Everyone -
We’re new to MMM but have been doing some work on our own prior to joining the forums. I read the template for the case study but it was really overwhelming and I didn’t understand most of it! Hopefully I’ve included everything – if not just let me know and I’ll add it.
We’re proud to say we have no car debt or school loan debt. We decided to track all our expenses this year because we feel we don’t spend much money on frivolous things but always felt broke. So far, this exercise has really made us aware of how little things add up.
Thanks for taking the time to evaluate our progress and we welcome your advice and thoughts about our situation!
Our financial goals are:
1. Pay off Visa debt ($4,450)
2. Grow savings to $20,000+ (for EF, improvements to rental home, and eventual car replacement)
3. Pay off rental house by making extra payments
4. Save money for land
5. Build home
6. Rent out current primary residence part of the year for extra income
Some changes we are currently working towards:
1. Finding work closer to home for Income Earner #2 to reduce commute time/expense.
2. Increase in side work for Income Earner #1 which should equal about $7,000/year
Life Situation: Married, 2 income earners both age 38, no kids.
Gross Salary/Wages:
Income 1: $52,826/year 2016 (this week just received raise to $60k/year)
Income 2: $27,693/year 2016
Individual amounts of each Pre-tax deductions:
Income 1: TRS: $3,167/year
Medical Plan: $784/year
Dental Plan: $404/year
Vision Plan: $188/year
(wasn’t sure where to put this: 403b matched: $2,639/year 2016
403b unmatched: $355/year 2016)
Income 2: Medical Plan: $650/year
Other Income:
Additional income: $4,000/year
Rental Income, Actual Expenses, and Depreciation:
1 rental property: $18,000/year
Expenses for property: $500/year (taxes and insurance listed below)
Taxes:
Income 1: Federal: $4,424/year
Social Security: $3,189/year
Medicare: $746/year
State: $2,211/year
City: $514/year
Income 2: Federal: $2,175/year
Social Security: $1,716/year
Medicare: $401/year
State: $731/year
City: $0/year
Current expenses: In 2017 we’re tracking every expense and receipt so our expenses listed on this post are just from the first 2 months of this year.
Mortgage: $2,000/month (actual payment is $970 but we are paying rental house off early for the psychological benefit)
Food: $600/month
Gas: $320/month
Electric: $240/month
Water: $40/month
Cable/Internet/Netflix: $100/month
Cell Phones: $132/month
Home/Yard misc.: $200/month
Gym: $55/month (will be cancelling in June when contract allows)
Auto Insurance: $87/month
Life Insurance: $32/month
Clothing/Personal: $100/month
Entertainment: $150/month (classes, music, etc).
Pets: $150/month (medicine, special food)
Charity: $37/month
Misc. expenses: $100/month
Property taxes & insurance for 2 homes: $5,000/year (paid in full once per year)
Car maintenance: $1,000/year
Work Expenses: $200/year (fees work doesn’t pay for)
Travel: $2,000/year
Assets:
Primary Home: valued at $400,000
Rental Home: valued at $208,000
2 cars: valued at $10,000
403b: $27,183
TRS: $3,924
4 IRAs: $22,402
Roth IRA: $6,635
Putnam Investments: $35,127
Savings Bonds: $943
Emergency Fund in savings account: $3,100
Emergency Cash: $350
TOTAL: $717,664
Liabilities:
Rental property mortgage: $56,000 left as of 1/1/2017 at 3.5%.
Credit Card debt: $4,450
TOTAL: $60,450
Specific Question(s):
We’re embarrassed to say we don’t really understand retirement planning but are eager to learn. When we were making better money we bought some IRAs and investments, but never really understood them. We’re also not clear on benefits of IRAs or CDs, etc. and we don’t understand the stock market either. Some of the terms used here on the forums are confusing like living on 4%? How does that work??? Any info would be great and please don’t laugh!
We’re working on budget friendly, healthy meals. Also getting insulation for the attic in our older primary home. Any tips are appreciated! ☺
