"SHOW ME THE MONEY" VIEWS on HOW to make MONEY GR

[call_me_ishmael]

How much does it cost to live? Other than for 18 months in my early twenties, I lived at my parents house until I got married, so I have plenty of cash now, but I have no idea how much it actually costs to live and do stuff because I've never really kept track of bills. I ate my parent's food, etc. I've tried to set up budgets in the past but they've never been very accurate.

Both of us max out our 401Ks right now, which is good. The cost of our home + taxes + insurance is 31% of our take home pay (after taxes, health insurance, 401K, etc). It is reasonable to expect that our total obligatory expenses will be 42% of our take home pay I estimate (800$ for car insurance, phones, cable/internet, food, electricity - is this reasonable?).

I'm looking for legitimate grown up advice here. Is 58% of your take home pay enough to live on? Are we over extending ourselves?

I worry about our ability to build up an emergency fund, pay off the house, etc. I don't think we will have any big expenses such as cars in the next 5 years. She has a 2006 and I have a 2007 and both are paid off.

I would like to have the money in an account to pay the house off in 5 years. I know my wife wants to work part time at the most when our children at young, so it would be really nice to NOT have a housing payment due each month by then.


---- EDIT -----

Also, what do you guys make of life insurance? I'm thinking about taking out a 500K policy on my wife and I of term insurance. I've considered taking our 1M, but that just seems overkill as our jobs both pay out 1.5x salary as a benefit in case of death. 500K would be plenty to pay off mortgage and cover significant medical expenses. We need to decide this soon as we want our insurance lined up before we close on our house. I was thinking about locking in the 30 year term now because the premium only gets higher and higher as you get older. Even though you're paying more up front, I wonder if you'd come out ahead if you opted to go for three ten year terms, etc. Does anyone know anything about this?

At some point, I think I will likely convert it to a full life plan in order to take advantage of some of the tax saving features to pass money on. I don't think I need to worry about that, yet, though, so term seems like a more viable option. Whole life is quite a bit more per month.