I just found out about the forums here on Get Rich Slowly and I'm excited to start the process of publicly journaling and getting honest feedback along the way.

Here's my situation:

Married for 5 years, together for 10.
Five year old DD, starting Kindergarten fall 2013
Baby girl on the way, due April 26, 2013
Bought a new home in Dec 2011 for $135K
I'll be 30 years old in October

Debts:
VISA - $6,521 (currently paying $1K/month, all spending ceased)
Home Improvement - $2,735 (currently paying $55/month until VISA is paid off)
401k Loan (me) - $5,139 (taken out to secure down payment for home...long story)
401k Loan (DH) - $4,000 (ditto)
Car Loan - $26,487 ($452/month, to be paid off 3/2018)
Student Loans @ 2.75% (me) - $30,087 (currently on graduated extended plan @ $85.63/month)
Student Loan @ 5.75% (DH) - $40,923 (currently on graduated extended plan at $201.54/month)
Mortgage - $130,821 (currently on bi-weekly payment plan @ $703/payment)

Total Debts: $246,713

Assets:
401k balance (me) - $20365.63 @ 11%/year (company 7%, me = 4%)
401k balance (DH) - ~ est at $16000 @ 12%/year (company 7%, DH = 5%)
E-Fund - $1733
Daughter's College Savings - $719.44 (began July 2011)

Total Assets: $38,818.07

Savings Rates:
Car Savings - $50/pay check (for maintenance, oil changes, tires, etc)
Home Improvement Savings - $50/paycheck (for misc repairs, savings for deck, new doors, etc.)
E-Fund Savings: 3% of Net @ ~ $160/month
College Savings @ $50/month

My next post will be a recap of our current income, goals, and questions about which scenario you would pick.

Thanks for reading!

So here's the rest!

My DH and I both work full-time. We bring home just about $5,751/month, after paying taxes, insurance, 401k contributions, etc.

Monthly Expenses:
Home Improvement (55.00)
Mortgage (1406.04)
VISA (1000.00)
Gas Utility (88.59)
Preschool Fulltime (758.00)
Cell Phones (165.00)
Auto Insurance (103.91)
Student Loan (me) (85.63)
Student Loan (DH) (201.54)
Car Loan (465.22)
Internet/TV (50.00)
Electric Utility (119.00)
Gas/Car Savings Budget (300.00)
Grocery Budget (400.00)
Miscellaneous Budget (300.00)
3% Net Savings (160.00)
Total for a Typical Month: $5657.93 (with about $90 left over...)

When the baby comes in April, I'll be taking the summer off, 6 weeks paid, the rest unpaid. We have a savings buffer of about $2K for that, but since we will not be paying for daycare/preschool during that time, we will also have an extra $758/month to work with. The VISA and the Home Improvement Loan are on course to be paid off in full by July, maybe sooner depending on the tax return amount, freeing up $1055/month in August.

I'm trying to figure out what to do after that. Add to our Home Sinking Fund savings? Our home was built in 1974 and needs all new exterior doors, our water heater is from 1974, our furance has 5-8 years on it, and we'll need a new roof in 10 years or so. Snowball the Car Loan? Snowball the Student Loans?

In September I'll go back to work either at a reduced schedule of 32 hours, or part-time. Part-time will be extremely tight financially, but doable, and I would get much more time at home to take care of the kids and my husband as well. If I go part-time, our takehome pay will be about $4200 (versus $5700), our preschool bill of $758 will turn into a baby daycare bill of about $300/month, while our student loans payments will go up $62.08 & $59.31 for mine and my DH's, respectively. There would be no extra money whatsover for any additional debt-snowballing until the car loan is paid in 2018, so debt reduction and savings would be put off for about 5 years. Going to a 32-hour a week schedule would be much better financially (take-home pay about $5000) and we would still have about $400-$500 each month for the debt snowball or savings into the home sinking fund, and I would be home each day to welcome my DD off the school bus, though we would pay the full-time daycare rate for a baby, about $600/month.

So, how would you handle this situation? Would you reduce your work schedule, take a break from the intensity of the $1000/month debt snowball and put the $500 into a savings account for Home Improvement? Or would you work part-time and enjoy the time with your family? Or would you continue to work full-time and pay $1000/month onto the consumer debts?

If you reduce your hours at your job, will you have to pay back your 401k loan within a certain time frame of going part time?

If I reduce my hours, it won't change the 401k loan repayment requirements, but going part-time would completely eliminate 7% of my total 11% being set aside for retirement each year b/c 7% is my company's base contribution of 4% PLUS 3% that they offer IF you match it 3%, which I do plus 1%.

I currently pay $54/pp on mine (automatic withdrawl...comes out post tax but before I get my check) and my husband gets $38.81 taken out of each of his checks. At this rate, the estimated payoff is 12/2016, which will free up approximately $185/month at that point. I could also consider early repayment of this loan as part of the debt snowball...

If I reduce my schedule to 32 hours, I get to keep the 7% company retirement contribution.

The more I type this out, the clearer it becomes that I should opt for the reduced schedule versus going part-time. Simple truth is that I must work if acheiving our family's financial goals are going to be a top priority.

I don't know if you fully understand how this 401k loan thing works. If you switch to part time (especially if you aren't eligible for the 401k), you may have to pay the loan back in 30 days. Otherwise, they mark it down as a distribution from the plan, and you get hit with taxes and penalty. This is what you must check on, not what your match could be.

32 hours is still considered full time at my office, so there would be no impact there. Maybe if I switch to PT it would impact the repayment time frame, but I'm not likely to go that route. I've posed the question to our HR dept.

I called ING and found out that changing my hours will not impact the repayment of my loan in any way; I will still have the same payment amount withdrawn automatically from each paycheck.

Huh. I thought I'd get more feedback honestly...someone ripping to shreds my debt and income or something like that? A "keep it up, you're on the right track!" Well, I guess I'll just keep talking to myself!

I went through our budget spreadsheet the other day and set up some long term goals that I'd like to put out there into the ether:

September 2013 - Start the Standard repayment plan for student loans to begin paying down the principal balance on 70K. At the same time, add $400/month to the Home Sinking Fund for new interior ($300) and exterior doors ($4500), estimated total cost of $5000. We have two double wide sliding glass doors that, at the very minimum, run $1400 plus $600 for installation/door. In the meantime, get a more detailed quote on the doors for proper planning.

September 2014 - Add $200 extra to the car payment to pay the loan off in 4 years total instead of 6. Continue to fund the Home Sinking Fund at $200/month for a new furnace, water heater, tree removal, etc.

February 2016- Car loan paid in full. Continue Home Sinking Fund for major purchases at $1000/month.

January 2017 - 401k loans paid in full, adding $182/month to available resources. Begin student loan snowball.

January 2020 - All consumer debt paid in full, including student loans. Begin 6 month emergency savings fund.

January 2021 - 6 months emergency savings fund contains $24,000.

Next Long-Term Goal?
Mortgage = ~$60K balance
College Education Savings (How much?)
Go on a mother f'ing vacation? Kids are 13 & 8

I did notice that your car loan is ridiculous, but I'm guessing it's brand new and you don't want to sell it. So...better luck next time with the car. It's way too expensive.

Now I see that you don't have an emergency fund, and I'm guessing that is why you had to take out two 401k loans for your house. What is the college savings for? You or your kids? I would cut that back to pay off some of your debts.

You need to start saving for emergencies now. With two kids (or one and one on the way), you want to be prepared in case something happens to you or your family. I would bump that up in the priority pile, and reserve the house sinking fund money for later.

Yes, car loan is absolutely ridiculous. I agree. Bad move basically, but we had a gas guzzler that need a new transmission and a car that we basically hated due to an annoying and expensive to fix knock in the front end. I know. It was dumb. We bought a 2012 Honda Civic and wrapped negative equity into it. Hopefully it'll be the last dumb car move. But we do love the Honda and are making do with one car, saving money on car insurance and registration fees. We plan to pay cash for our next one and the one after that...

You're right, I didn't list our e-savings up there, but we do have $1733 in an account right now, with the 3% of net going into that each pay period. By the time the baby comes, the balance on that account should be about $2300.

College savings is for the kids. I have a five year old, one on the way, and we're planning for one more. Not sure how much to put there. I don't want to pay for it all, but I want to help if need be. Or be able to provide our kids with that money for a down payment on a house.

Oh, and the 401k loans? Yes, that was b/c we didn't have any savings. We're paying 3.25% interest on that loan to keep the account growing. Our prior neighborhood was bad bad bad (shootings, robberies, drug dealings, prostitutes) and we basically did what we had to do to get out. New house is in the 'burbs in a small town on a beautiful river, quiet subdivision with lots of old people, and more land so I can have a garden and let the kids play outside without fear. We took the hit to keep our family safe.

Thanks for the feedback!! I'd appreciate any tips or words of wisdom or constructive criticism, too.

Sorry, goodchap, it's been a busy week, and this volume of information takes a bit of time to digest. I promise I'll post over the weekend!

I had written some, but decide not post them. They were along the lines of me making more double what you and your husband make, yet my vehicle is only worth about $2k on a good day.

I also had a cheeky comment about the two ways of increasing cash flow. 1) make more money. 2) spend less. You, as many young people, only focus on the first. An interesting exercise is to calculate up how much you actually need to make to have $1 to spend.

Personally, I find you're in a highly "leveraged" (that's a nice way of saying a huge hole of debt) position. I would personally be very uncomfortable with it and would A) stop procreating and B) go on the Dave Ramsey diet until I had it taken care of. But, others are more comfortable with it - some make it OK, and some don't.

I'd start with your emergency fund. And I wouldn't worry about college for the kiddo's until you get the rest of your crap in order. As you know, there will always be loans for their education, but loans for your retirement and debt repayment are much more difficult to come by.

Is your goal to go on a vacation with your kids in 8 years? Wow.. I think you will need a vacation before then, so might as well make a pile for that while you can.

Yeah, a nice exotic vacation would be nice. Sure, but we'll make do with camping & road trips for now.

And constructive criticism is welcome. Being snarky isn't really helpful whatsoever. But thanks for taking the time to read all this.

I'm just starting out and very recently decided to do this, so yes I do have lots of debts. Having a plan to be out of debt by the time I'm 36 seems like a pretty good start to me. I came here for support and for help along the way to help me see what I'm missing.

My thoughts: First, I'm glad to see how aggressively you are paying down your credit card debt, and that you are not using the card for new purchases during the pay-down time. Second, your e-fund appears to be far too low given the amount of your expenses and the size of your family. I would stop on the college savings and funnel that into the e-fund for now. I personally would also re-direct the home improvement money to the e-fund, as well. Third, you already know, but your car loan is crazy. Given that your car is not worth as much as your loan balance, I'm imagining your payment includes gap insurance (or is reflected in a higher interest rate), as well, which is just a waste. On the other hand, it is good to hear that you're making do with one reliable car that is saving you in gas and car insurance costs, and that you're saving cash for the next car. Fourth, though his tone may have been off-putting, BF is right that you and your husband have a ton of debt, especially compared to assets, and you'd do well to examine your expenses with an eye towards cutting back on the things that are least important to you. Fifth, with regard to your original question about whether to reduce your work hours once you return at the end of the summer, I personally would not go below the 32 hours. But really this a question about what your goals are, which only you can answer. If your goals include financial health, there's no chance I'd go below 32 hours. If your uber-top goal is to spend a lot of time with your kids day-to-day, then you could reduce further. I consider that scenario pretty risky from a financial perspective, as it would keep your debts around for far too long for my tastes. Finally, for your question about whether to back down from the $1,000 per month to pay down the Visa card, I would say no way -- keep up the great work there!