Simultaneous Savings

[threebeansalad]

As I wrote in another thread, DH and I have a goal of purchasing our first home in 3.5 years from now. As such, we're squirreling away down payment money in CDs and high yield savings and contributing to retirement in 401(k) and Roth IRAs.

I have the urge to also start some simultaneous investing in taxable mutual funds. Perhaps this (yet to be made) investment could be money we could tap into in 10 years for home improvements. Is this unreasonable? Should we just be socking away as much money as possible into the CDs for the down payment and worry about more mid-long terms savings goals (aside from retirement) AFTER the we've made a home purchase?

[simple987]

I guess it depends on how fast you can save and what you want to have saved for the down payment. Buying a home sooner can get you out of paying rent, but make you still need plenty of other cash available for any repairs that might come up.

[scfr]

Assuming you're maxing out your tax-deffered retirement fund contributions, in your shoes I'd continue squirreling money away for the home purchase: in CDs and high-yielding MMAS as you're doing, and I'd consider adding Treasuries to the mix as well. You don't know how much of a down payment you'll need, and in addition to the DP you'll have to pay all of the loan closing costs (they addup!), plus pay for a home inspection or two and moving expenses, not to mention the fact that you may want to buy a piece of furniture or two after you have bought a house.