First post! I have always been frugal but having my first child 6 months ago has really made me motivated to attempt to make the best decisions with my families money. I will breakdown my situation in hopes of getting some advice from you wise Mustache Members...
I am 28 years old, Wife 27, daughter 6 months. My salary is $50,000 (expect 4-5% raise each year) with hers being $40,000(salary is stagnant). We live in a city with an extremely low cost of living.
Purchased a house for $155,000 (Appraised at $210,000 last year). Have $110,000 left on a 15 year loan.
Owe $20,000 on new car(2015 model) with 0% interest for 4 more years, 2nd car was paid in cash(2012 model).
We are 50/50 on deciding between private and public schooling (expecting to have 2-3 kids). We live in a city where public schools offer same education as private.
We expect to pay for 100% of college education for children.
75% chance we move to "forever home" in 6-8 years. Would like to have less than $100,000 mortgage, attempting to build housing equity to accomplish this.
We have spent circa $35,000 on upgrading our home the first 3 years we have lived here and don't see any costly housing expenses in the near future. We expect this to increase our ROI.
Debts: $110,000 mortgage and $20,000 car loan. No other debts.
Current monthly investments / expenses:
Mortgage: $1,150
Extra principal payment on Mortgage: $350
Car payment - $350 (ends in May of 2021)
HSA - $200 with $25 employee match
529 College plan - $100 ($1,000 total)
His Roth 401K: 6% with 3% match ($25,000 total)
Her 401k: 6% with 1% match ($10,000 total)
VTSMX Vanguard - $20 - ($3,200 total)
Baby Savings Account - $200 - ($1000 total)
After doing some research, I am planning on moving investments / expenses to the following:
Proposed Monthly Plan:
Mortgage: $1,150
Extra principal payment on Mortgage: $350
Car payment - $350
HSA - $200 with $25 employee match
529 College plan - $100
His Roth 401K: 10% with 3% match (from 6%) (Will attempt to max out 401K when car is paid off in 4 years)
Her 401k: 6% with 1% match ($10,000 total)
VTSMX Vanguard - $20 - ($3,200 total)
Baby Savings Account - $100 (instead of $200)
Open up ROTH IRA - Max out at $5,500 a year
Notes:
- I understand our 401Ks are lacking but we found it difficult to contribute the amount we wanted with our careers not starting until 24-25 years old on top of purchasing and fixing up a house and purchasing a much needed new car.
- I understand investing all disposable income in stocks is the better "financial decision" but my wife and I feel much better with the diversified approach. She is extremely risk-averse and throwing everything into stocks would take quite a bit of convincing.
Do you see anything I am doing that you think I should look at adjusting?
If you were in my situation, what would you do differently?
Thanks in advance for the advice!
