Feeling lost... Seeking Guidance

[supermarvin76]

Please bear with my story, and I would love any and all advice...

My wife and I are in our early 30's with two young children. I spend 9 years in the Marines and have been out for a few years now. Lucky, I landed a job with the best company in the area, have been there since my exit from the military. However, while benefits are pretty good, the pay is far, far less than what I made in the military. My wife works too, I would love her to be able to stay home, but with our finances, it simply isn't feasible. As soon as I get home, she is off to work, three nights a week. Frankly, I hate this arrangement, but it is what it is I guess. On top of that, I am also pursuing a degree from a state university.

Here is our finance situatiion:

• No outstanding loans
• No car payments
• Mortgage is about $850 / mo
• Our next largest bills are Comcast and Verizon
• We net about $2000 / mo
• I contribute 12% to my 401k
• About $40 / mo going to savings
• We about $125 / "left over". And due to our crazy schdules, this is easliy all spent eating out
• I have 1 credit card, and she has 1. Blanaces total about $6,000
• About $7,000 in savings

I really feel like we are headed down the right road, but it is very frustrating and depressing. We are looking for bills to cut, but the only two logical ones, (Comcast and / or Verizon) are ones that truly help us through our days. I dread the time that comes and we need a major home or car repair.

I truly feel like we are merely existing, not living.

Please send some advice.

Thank you!

[disneysteve]

Welcome to the site.

There are several things I see in the info you've posted.

1. Your mortgage is way too high for your income. The rule of thumb is that your home, including principal, interest, taxes and insurance, shouldn't exceed 28% of income. Yours is at 42.5%. No matter what else you adjust in your budget, you aren't going to be able to compensate for this problem. The only ways to fix this are to move to a cheaper home or boost your income to get the payment in line.

2. You started by saying you had no loans but then mention that you owe $6,000 on your credit card. That is an outstanding loan. Have you stopped using the cards? If so, what was the source of that debt. If you are still using the cards, WHY?

3. It is nice that you are putting 12% of income into retirement but right now, until you get out of debt, that might not be the best choice. Consider cutting that back to just enough to get the full company match. I'm not positive on this one because we need to see your entire budget to give complete advice but keep this thought in mind.

4. The huge problem here is your income. Even with both of you working, you're only bringing home 24K and trying to support a family of 4 on that amount. I'm not sure what you mean when you say you work for the "best" company in the area, but it sure doesn't sound that great. What are you doing to look for better work?

[TheShopMyCloset Project]

I am wondering if you would consider finding a better job in another area? You probably have a number of transferable skills from your military experience that would help you find a higher paying position. But, if you move try to keep your expenses low. While not perfect, you DO seem to be on the right track! Your income just seem to be really low though. The credit cards do need to be paid off, but the bigger issue seems to be the income issue. Some food for thought.

[snafu]

I wondered what interest rates you are paying on CCs? While I appreciate working and taking classes keeps you busy; the decision to buy a home & carry credit card debt considerably increased income requirements.

What can you do to help make meals at home? Eating out carries the double negative of sodium, fat & chemicals and more expesive than home made meals. Most of us roast a chicken or pork loin or slow cook a chuck roast every Sunday to slice forming the basis of meals for the week over potato, rice, pasta, kasha, couscous or Quinoa + salad & at least two vegetables. If you like sweets bake cupcakes from mix, jello, pudding using powdered milk [cost efficient] or seasonal fruit. Take-out coffee is shockingly expensive bought daily.

What can your wife do to increase income and reduce spending?

[FireBal989]

You could look for a better, higher income job in the area even if the benefits may not be as good. Does your wife get benefits? What are you going for your degree in and how long do you have?

Having savings is good, but it's important to get the credit card debt payed down and earn more money so that your mortgage is at a lower percentage of your income. Around 42-43% is quite high, best of luck to you and your family :-)

[Tree0164]

It sounds like you really need to do a budget.

1. Create a weekly meal plan to keep you out of the restaurants/fast food stuff. I am doing a no eating out challenge right now for September and October.

2. For the two of you working, your net income seems fairly low. Can you decrease your percentage being taken out for your 401k. Also are you getting back a tax refund each year? If so, you may want to adjust your tax withholding to get more back in your paycheck.

3. We cut cable last year down to basic cable. and saved $900 over the year. We got hulu plus and netflix to make up.

4. What are some of your smaller bills? Can you cut off a cell phone and move to a pay as you go etc