Advice needed on moving out!!

[MonkeyMama]

I am rather pro-home ownership, and it can make much more sense than renting. (If renting is comparable, tax breaks will give owning an edge. Condos are generally pretty low maintenance, 90% of the time - you always hear of special assessments, etc., but more likely than not it is a far more affordable option than owning a home).

That being said, I wouldn't BUY anything I only planned on to live in 3 years.

In certain markets this may make sense (if you buy a condo until you can afford more, which seems to be your goal). It really depends on the market. But I think beyond extremely expensive and competitive markets, it probably makes little sense.

If you could rent and save the down payment on a home in 3 years, I would just rent. I would only own for 3 years if it gave me a significant edge. (i.e. we owned a condo for 2 years - planned to stay longer originally - BUT it cost 50% of rent on the same apartment. There was a clear and significant edge. The market was so expensive that condos appreciated faster than single family homes, at the time. These are reasons to buy a condo. I am not convinced I would buy a condo in your shoes, though).

[BigVic]

Ok thank you everyone! You all have been so helpful. I have another question now. Say I move into an apartment with a roommate. How much of my extra money should go where considering my age and situation?

Save for larger EF?

Save for 20% down payment?

Save for retirement? (I have the 5% in my 401k, but should I be putting some into a Roth IRA or wait until I have my EF and 20%?)

Pay $6,000 car loan off?

[disneysteve]

Ok thank you everyone! You all have been so helpful. I have another question now. Say I move into an apartment with a roommate. How much of my extra money should go where considering my age and situation?

Save for larger EF?

Save for 20% down payment?

Save for retirement? (I have the 5% in my 401k, but should I be putting some into a Roth IRA or wait until I have my EF and 20%?)

Pay $6,000 car loan off?

I like the rule of thumb from Elizabeth Warren's book: 50% for needs, 30% for wants, 20% for savings. You need to structure your budget accordingly.

For the savings portion, normally I'd say 15% for retirement and 5% for other shorter term goals. In your case, though, I'd adjust that and say 10% for retirement and 10% for other, like buying a house and building an EF.

Of course, in that formula, the 30% for wants is adjustable. You can trim your luxuries and boost your savings to get into a house quicker.

Personally, I wouldn't prepay the car loan. I'd rather save for the house.

[devid fox]

I like the rule of thumb from Elizabeth Warren's book: 50% for needs, 30% for wants, 20% for savings. You need to structure your budget accordingly.

For the savings portion, normally I'd say 15% for retirement and 5% for other shorter term goals. In your case, though, I'd adjust that and say 10% for retirement and 10% for other, like buying a house and building an EF.

Of course, in that formula, the 30% for wants is adjustable. You can trim your luxuries and boost your savings to get into a house quicker.

Personally, I wouldn't prepay the car loan. I'd rather save for the house.

Yes,your budget management is excellent,and as a matter of fact he can go low in all luxuries and thus give a boost to his savings.And about his car load,if he has a need for it (which I think he surely has) well he can try to go for a second-hand car as long as his housing problems are not resolved.And doing a EF is a very wise decision in my point of view.He can also go for post-retirement savings scheme if he wants.