Here is our obligatory Sankey: https://i.redd.it/6p6iwwniqtkc1.png
Background:
My wife and I just had our first baby, and she is planning to stay home with him until he goes to school - so probably for the next five years. I am obviously so grateful that we are fortunate enough to be in the financial situation to be able to do this. The linked Sankey is our monthly budget before losing her monthly income, so no expenses have been adjusted to account for the new financial reality of her not working.
Basically what I want to know is are we now living above our means? If so, what are red flags about our spending that can be cut? Should I dial back my 401(k) contribution for the next 5 years? My primary concern is the lack of monthly savings and inability to re-populate our emergency fund (see below) in the event of an emergency. Prior to her leaving to stay at home with the baby, we were saving probably $4K per month (her entire salary). Now, as you can see in the diagram, it's only about $500, which is not enough buffer to make me comfortable month-to-month.
Some caveats about what's pictured, as well as other missing info about our financial situation:
Background:
My wife and I just had our first baby, and she is planning to stay home with him until he goes to school - so probably for the next five years. I am obviously so grateful that we are fortunate enough to be in the financial situation to be able to do this. The linked Sankey is our monthly budget before losing her monthly income, so no expenses have been adjusted to account for the new financial reality of her not working.
Basically what I want to know is are we now living above our means? If so, what are red flags about our spending that can be cut? Should I dial back my 401(k) contribution for the next 5 years? My primary concern is the lack of monthly savings and inability to re-populate our emergency fund (see below) in the event of an emergency. Prior to her leaving to stay at home with the baby, we were saving probably $4K per month (her entire salary). Now, as you can see in the diagram, it's only about $500, which is not enough buffer to make me comfortable month-to-month.
Some caveats about what's pictured, as well as other missing info about our financial situation:
- Bi-weekly pay is shoehorned into a monthly budget, so in theory there are two "extra" paychecks per year, which would mean the total net pay amount ($7902) being saved yearly in addition to the $500 per month
- I get a yearly bonus of 25% of my salary (guaranteed), which comes out to about $30K after taxes
- I have RSUs vesting throughout the year, which equate to about $30-40K assuming a very pessimistic outlook on the company stock price
- We have a fully-funded emergency fund for 6 months
- Together we have about $400K in investments and retirement savings (401k/etc)
- We own our primary residence (mortgage w/ $330K equity), as well as an investment property (mortgage w/ $150 equity) which we rent out clearing ~$200/month (we're mainly doing it to build equity, not to profit month-to-month)