Areas for improvement/weaknesses?

[dlyssesuouglas]

I thought I’d post our current situation and get some feedback on areas of weakness or places we should improve.

Profile:
30M, married. 1 child (9mos) planning 1-2 more within next 5 years.

Income: $96k, 100% work from home. Wife stays home with children.

Assets:
Home: $250k value, $175k mortgage ($1200/mo PITI) at 3.25%, matures in 2049. Built 1998, New roof, floors, and paint. Home will be sufficient for 3 children as mentioned. $500/mo sinking fund for repairs, maintenance and furnishings.

Cash: $60k in HYSA/t-bills

401(k): $60k (40k Roth/20k pretax match), contributing $6k, $3k match

IRA: $35k (401k roll over)

Roth IRA: $37k, contributing $6500 (max out every year)

HSA: $35k, contributing $7850 (max out every year)

Vehicles: $500/mo sinking fund for repairs and replacement.

20 year old sedan. Runs fine, well maintained. 235k miles

7 year old SUV, no issues. 150k miles

Insurance: 1.5 million term policies maturing between 2041-2046.

Liabilities:

$29k student loans. Rates range from 3.4% -4.65%

What are some areas of financial weakness we need to consider?

Thanks in advance!

Edit: also have $35k in a brokerage in various funds.

 

[sowhatwithit]

@dlyssesuouglas Not exactly sure why you’re carrying the extra debt. It would seem like a great idea for the wife to get even a part time job and y’all pay down that debt. You can have it gone in 2 years at $1000 a month which is more than easy to earn from a few hours a week part time job.

Other than that, what about your kids future? You can start a 529 at any time. If you have a family business, you can also register $6500 earned income each from it and put it toward their own Roth IRA. Both the 529 and Roth will be very helpful for them in 20 years.

The last part is personal growth. I am not seeing much opportunity in your budget for fun and growth activities. This can be vacations, hobbies, classes, entertainment, experiences etc. It is important to spend on this also.

 

[dlyssesuouglas]

@sowhatwithit Thanks for the response! We’re only holding onto the student loans because our cash (mostly t-bills) is paying more than the interest in those loans,m. If/when the Feds decide to drop rates we’ll take the cash and pay them off. It might only be a couple hundred bucks a year, but to me it’s worth it.

We’ve talked about her working once the first baby is a little more independent. I’ve thought about starting our own business (couple different ideas), but we’ve been on the fence about it. We really need to sit down and come up with a plan.

I’ve debated the 529, mainly because there are no incentives in my state besides the tax deferred growth. With the recent legislation regarding the ability to roll over a 529 to a Roth IRA I probably need to revisit that.

We don’t have a ton in the budget for growth. We’ve both recently completed graduate school (company paid for it), so we were Both little burnt out there. We do need to sit down and talk about vacation budgeting now that the baby is more active and we can actually do something.

 

[sowhatwithit]

@dlyssesuouglas Vacation and hobbies I consider personal growth. Get new experiences and build those key memories for your kids.

 

[metanoiabum]

@dlyssesuouglas You can roll over only a total of 35k.