Thoughts/advice/ideas?

[amberbamber]

I'm gonna lay it all out and see what y'all think

Hubby brings home roughly $1300 on the 15th and 30th of each month.
Out of that we have
Rent: 800
Van: 475
Sallie Mae: 200
Life Insurance: 24.05 +39.59
Auto Insurance: 115.02
Cable/Internet: 45.00
Phone/Netflix: 45.00
Cell phone: 65.00
Power: Averages $250 over 12 months


My husband's new company offers him a 401(k) but they do NOT match any contributions at all
We both have IRA's but haven't been contributing to them in the last year. We've been paying debt hard and steady.

After talking to my husband some more, we really need to start pushing the money for retirement and our kids colleges.

I'm thinking we can start putting $100 a month into the IRA's and but then we are cutting our finances really close. Not leaving much wiggle room for gas and groceries.

We will have the van paid off in less than 2 years. And we will drive it into the ground. My husband's truck is paid off and we'll be driving it into the ground also. We have $6k in savings.

We are hoping to build a house in 2 years (my husband is a builder), but I'm really thinking that until we can max out the IRA funds and children's college funds we should be rethinking the house thing. Or am I looking at that backwards? House then retirement and then kids college?

When building our house we're going to be looking at a $1000 a month house payment. All of our debt will be paid off also, so we'll free up almost $700 a month paying the debt we do right now.

If you've stayed with me this long, thanks! Just really thinking outloud and hoping to get some good advice!
Thanks!!!

[EEinNJ]

I think the thing to save the most for is what you'll need the soonest. A house is a big expense, not just the downpayment but all the things you start buying for the house.

You can save for the other stuff, just don't do as much. Keep in mind a $100 IRA contribution won't cost you the whole $100 from your check.

The other thing that comes to mind is car repairs and saving for a new one. Even if you keep them a long time, sooner or later you'll have to replace them or pay big repair bills.

[anonymous_saver]

I think it would help if you were more detailed in your budget (groceries, household necessities, etc.). I think paying off your debt aggressively is important. How fast could you pay that off without saving for IRA's?

Could you try to get a PT job where you could contribute some to the household expenses? I think that could really help out.

I would focus on paying off the van, then retirement. I would start saving relatively a small amount for retirement until you save 6 months worth of an emergency fund and a down payment. I would not even save for your kids college fund, unless you have all debt paid off (except a mortgage), have a full emergency fund, and are contributing fully to retirement. I would only start saving for their college at that point. Think of it this way, are you really helping them by saving for their college while you guys get deeper and deeper into debt? I would vote no.

Good job on getting things in order!

[maat55]

What are your interest rates and do you have any other debts not mentioned?

If sally mae has a small interest cost, you should look at it as part of your house payment. Paying off your van(quickly) or selling it should be top priority.

After this is accomplished, you need to save for your down payment. If your EF is less than six months, you should finish it. Then, start an retirement Roth IRA and stick to it.

Education savings should only come after you have your EF, house established and at least 10% funding your Roth.

Ways to speed this up are to cut your budget to the bone(cells, eating out, unnecessary foods and luxuries), get extra work, sell unneeded items. Good luck.

[GREENBACK]

Am I missing something here? Your DH brings home $2600 a month. You have a little over 2k in the monthly expenses listed. You're a SAHM so a family of five is living on $500 a month? I'm certain you have more expenses than this, particularly, with three kids. Even if debts are paid off you're still looking at $800 a month to live on or less depending on the house payment. Don't forget the expenses of owning a home, even if it's brand spanking new. They can be very high.

This seems like a pretty tight budget and I don't think you've listed it all that you're paying.

I presume you have some type of employment if you have an IRA. The numbers don't really add up to well for what you have in mind.

[amberbamber]

Am I missing something here? Your DH brings home $2600 a month. You have a little over 2k in the monthly expenses listed. You're a SAHM so a family of five is living on $500 a month? I'm certain you have more expenses than this, particularly, with three kids. Even if debts are paid off you're still looking at $800 a month to live on or less depending on the house payment. Don't forget the expenses of owning a home, even if it's brand spanking new. They can be very high.

This seems like a pretty tight budget and I don't think you've listed it all that you're paying.

I presume you have some type of employment if you have an IRA. The numbers don't really add up to well for what you have in mind.

NO, you're not missing anything. We do not have any other debts but the ones listed. A van payment and a Sallie Mae school loan. The interest rate for the school loan is 8% and the van loan interest rate is 7.2%

My husband builds houses for a living so we would be building the new house at cost and have instant equity. Not that we would use it, but have thought about putting the student loan into the house mortgage. We will have the van paid off before we build the house.


I have no reason to be deceptive. That is our budget and yes we live on it quite comfortably. At this point to put 2 kids into daycare and for me to find a minimum wage job would NOT pay. So, my husband and I have decided what is best for our family is for me to stay home.
Good GRAVY!

[amberbamber]

Also I do have an IRA and I stay home. My husband thought I deserved a retirement also. We haven't contributed to them in a while, but yes I do have one and so does my husband.

[GREENBACK]

OK, it's already been said but I would definely kill the debt first while establishing an EF. With a home you don't want that hanging over your head. Illness, job loss or a bunch of other things can ruin you here.

[disneysteve]

I'm certain you have more expenses than this, particularly, with three kids.

NO, you're not missing anything.

That is our budget and yes we live on it quite comfortably.

amberbamber, I think what GREENBACK was asking was that you listed your fixed costs - rent, car payment, insurance, etc. What you didn't list was your variable and day to day expenses like food, clothing, auto maintenance, medical expenses, gas for car, school activities, entertainment, travel, newspaper and magazine subscriptions, lawn care, charitable giving, etc.

Without knowing the big picture of all of your spending, it is difficult for anyone to give advice.

I would agree with anonymous and maat that college savings should be your last priority. There are lots of ways to finance education. There are not a lot of ways to finance retirement.

[swanson719]

Pay off the debt, finance retirement accounts, then college, then house. You need to work on getting your husbands income up - maybe he can get some trade schools or something so he makes more. Or maybe move to an area with better construction right now, like Houston. If you're renting anyway, it wouldn't be a bad idea as a temporary thing to get the debt done.

I'm a big fan of Dave Ramsey - try looking at his baby steps.

[GREENBACK]

amberbamber, I think what GREENBACK was asking was that you listed your fixed costs - rent, car payment, insurance, etc. What you didn't list was your variable and day to day expenses like food, clothing, auto maintenance, medical expenses, gas for car, school activities, entertainment, travel, newspaper and magazine subscriptions, lawn care, charitable giving, etc.

Without knowing the big picture of all of your spending, it is difficult for anyone to give advice.

I would agree with anonymous and maat that college savings should be your last priority. There are lots of ways to finance education. There are not a lot of ways to finance retirement.

Yes that is what I was wondering but but when you say you live "comfortably" I accept that. It just seemed tight to me.