1 Year Update

[surethang]

EDIT: 26 Years Old

April 2015:
$7k in bank accounts
$32,000 student debt (low interest rate) $350/mo 9 years left
$181 a month car payment
$487 Rent

Since last April:
Increased job income from $32,000 to $45,000
Increased my bank account savings from $7,000 to $20,000
Student debt as dropped from $32,000 to $24,000
My rent is still $487 plus $50 for utilities
Car payment is still at $181
I am putting in 8% into my 401k with a 3% match. Company also does a profit sharing of 4% of income they put into your 401k annually.
Credit score increased from 642 to 780

My question is where do i go from here? I feel like i have a saved a good chunk. I would like to purchase a house but not sure if i should use my 20k in savings for a down payment or work on my school loan first. Thank you

[bjl584]

Great job so far.

I'd focus on getting rid of the car payment. What do you have left on it?

After that you can continue saving for the house down payment.

[surethang]

Great job so far.

I'd focus on getting rid of the car payment. What do you have left on it?

After that you can continue saving for the house down payment.

My car is a lease. I got it later in college to save money on a monthly payment. My goal is to buy something used (12k-15k) next august when the lease is up. OR buy out my current lease it will have around $12,000 left on it.

[bjl584]

Definitely get rid of the lease. Preferably buy a car with cash when the time comes.

[Jluke]

one suggestion is to open a Roth IRA - perhaps contribute $150/month to start.

If your goal is to own a home, then you need to get an idea of what home you can afford, what is 20% of that amount (cash needed), plus closing costs.

Determine your mortgage amount, monthly payment, including property taxes and insurance.

Only you can know this, do not go to a bank, mortgage company and ask them what you can afford. We can help you with this if you want.

You'll also need an EF and depending on what you own already (furniture, appliances, tools, etc) you need to factor that in as well.

if you were buying a 100k house, you would need 20k down, plus closing costs (estimate 5-7k??), and probably another 10k on top of that for house stuff, and your EF

Once you know those numbers, then you can really start saving.

[snafu]

Thanks for the update. Seems the job is working out as income has increased dramatically and great to see you participate in their retirement program. What do they offer? What did you choose? What is the MER? These are very important to the final line very far into your future.

I wish you'd include a few more line items in your cash flow like vehicle operation/maintenance, food, rental insurance if you feel your stuff has value and separate out a 3 month EF.

I'm all for savings DP for a house if you're rock solid positive you'll stay in that community for a long time. I suggest you do some research and lay it out for SA participants to review from an unemotional, factual perspective. You can easily follow RE details online. Type, square footage, lot size, location, location, location, services, amenities, school ranking, # bdrms, # bthrms, condition [your skill sets]. Fees are often a percentage of purchase price and it helps to know in advance.

Financing choices likewise available on-line. Interest [amotorization table], tax, insurance etc so you understand where every dollar goes before you use real money or sign contracts.