My wife and I make a decent amount annually, $130k combined. Cashflow is a serious issue. We truly live paycheck to paycheck and have maybe $100 in our accounts at the end of the month. Our monthly cashflow is as follows.
net income $6950 (after taxes, deductions, etc.)
car pmts. $970
student loans $519
cell phone $160
This leaves us with about $1000 for any extras like car maintenance, etc. food and diapers for two kids both under 2 years old.. that doesn't leave much to tackle debt/save.
Should we use our tax return and our $6k in savings to pay off one of the student loans which will free up $145/month? Should we try and pay a car down and get rid of it somehow? Should we lower our retirement contributions? My wife does $100 per check, I do 10%... If we have to just accept being tight what little we have... what should we do with it? save? pay down car loan? studnet loans? I'm open to suggestions. Thanks!
Look at your spending categories. Don't spend $970 a month on car payments, are you kidding me? Save $6000 and buy a Honda civic, then use savings to buy outright the second car that can tote the kids ( Honda odyssey , passport?)
Does your wife (the lower income earner i assume) make enough in her job as take home to pay for the day care. If not, have her quit her job and take care of the kids until daycare is no longer needed.
Those are the two most material items. Sure do the other things that comments reflect- cell phones, cable vs Netflix . But solve these items and you will create substantial free cash flow.