$30K in savings no 401K. Need some opinions

[cologero]

Hope everyone had a nice Thanksgiving. Sorry for the delayed response, been a couple busy weeks! When I run the numbers for a $200K house on Zillow/Trulia, putting 10% on a 15 year mortgage is showing about $1,600 per month (incl. taxes & insurance). $150K home comes closer to $1,200-$1,300 range, but I'm not sure I want a $1,200 mortgage (on a house that's probably going to need some work), compiled with the fact it'll be $300/mo more than my rent is now. Ugh, this is stressful lol. Would buying another rental property make sense?

I know this won't be exactly accurate, but assuming I bought a house with a $1,400 mortgage, and my existing bills and take home pay ($3,850) remained constant and I continued to put 13% into my 401K, here's how my budget would shake out:
-$1,400 mortgage
- $400 Church (10% of net)
- $150 Utilities
- $100 Cable/Internet
- $100 Phone
- $45 Gym
- $75 Car Insurance
- $240 Car Payment
- $300 Groceries
- $200 Gas
- $300 Personal (dinner, dates, clothing, misc.)

This would leave me about $500 per month for repairs, savings, etc.

[LivingAlmostLarge]

I might consider waiting one more year and saving $800/month on top of rent for house down payment = $7200/year which gives you another 5% of purchase price on $200k home. It'll also define if your $1600/month mortgage is palatable. No to buying a rental. I'd focus on getting yourself into something.

[breathemusic]

Keep in mind that if you make extra payments on whatever home you buy and pay down the loan faster to build up that 20% equity, you'd then be able to get rid of the PMI, so your monthly costs would drop at that point. But the longer you can hold off, the more you can save, the more down payment you have, and then the faster it will be for you to get rid of PMI.

[cologero]

I might consider waiting one more year and saving $800/month on top of rent for house down payment = $7200/year which gives you another 5% of purchase price on $200k home. It'll also define if your $1600/month mortgage is palatable. No to buying a rental. I'd focus on getting yourself into something.

Since I'm stuck in my current lease until next Dec, one more year of rent minimum seems realistic. What's going to be a challenge is saving $800 month for additional down payment AND saving $5,500 to fun my Roth IRA. That's about $15K to bank in the next 12 months...or approximately $600 per pay check. That also doesn't include increasing my 401K up from the current 13% it's at.

[LivingAlmostLarge]

That's true and it might be worth using the time to peruse the market. see what is out there.

[cologero]

That's true and it might be worth using the time to peruse the market. see what is out there.

I think my next step is to steer the course I'm on for the next 6-8 months. I'll revisit my savings then and provide an update here. And hopefully by then, I'll have my car sold as well. If all goes well, perhaps I can purchase a home around this time next year (or sooner).

I do really appreciate everyone's continued advice and feedback here. I've learned a lot!

[cologero]

Hello friends,

I wanted to share an update on my progress. Please let me know how I'm doing for my age. I thought it's probably best to just keep this thread going (albeit that it's getting long). So about 3.5 years ago all I had was $30K in savings, about $9K in an IRA, and student loan/car debt. As of now, at 38 years old:

401K: $37,500
ROTH IRA: $25,000 (maxed in 2017, 2016, 2015, 2014). This is diversified as: 20% bonds, 25% domestic stocks and 55% domestic large cap stocks through Vanguard.
Traditional IRA: $10,000
Savings: $36,000

I continue to contribute about $1,000/mo into my 401K (takes full advantage of employer match). I also plan to continue to max my Roth out every year if possible while adding to my savings account. I sold the sports car, which was tough, but I guess my priorities have changed. I'm basically debt free aside from apartment rent and normal bills (utilities, TV, tithes, cable, and insurance). And I still owe $11K on my current vehicle (it's worth $24K with a 2% interest rate) and I still have a rental property that I'm at breakeven on and I'll either have to sell or re-rent in about 1yr ($500/mo mortgage that's covered by the renter). Bills are roughly at $2,000/mo, and my take-home pay is $3,800/mo.

Where do I go from here? I'm torn between buying a home to build equity or continuing to pay rent. I live in a fairly LCOL area, but I don't have 20% to put down on something that I'd be happy with while maintaining an EF and 3-6 months worth of bills. I hate to do it, but I'm thinking I should stay in an apartment for the next couple years or so...and just maybe I'll save a larger down payment...or get married one day and which might help with the home ownership cost. Quite frankly, I feel like I've made ok progress and am very grateful, but I'm just exhausted trying to figure this out!

[bjl584]

Hello friends,

I wanted to share an update on my progress. Please let me know how I'm doing for my age. I thought it's probably best to just keep this thread going (albeit that it's getting long). So about 3.5 years ago all I had was $30K in savings, about $9K in an IRA, and student loan/car debt. As of now, at 38 years old:

401K: $37,500
ROTH IRA: $25,000 (maxed in 2017, 2016, 2015, 2014). This is diversified as: 20% bonds, 25% domestic stocks and 55% domestic large cap stocks through Vanguard.
Traditional IRA: $10,000
Savings: $36,000

I continue to contribute about $1,000/mo into my 401K (takes full advantage of employer match). I also plan to continue to max my Roth out every year if possible while adding to my savings account. I sold the sports car, which was tough, but I guess my priorities have changed. I'm basically debt free aside from apartment rent and normal bills (utilities, TV, tithes, cable, and insurance). And I still owe $11K on my current vehicle (it's worth $24K with a 2% interest rate) and I still have a rental property that I'm at breakeven on and I'll either have to sell or re-rent in about 1yr ($500/mo mortgage that's covered by the renter). Bills are roughly at $2,000/mo, and my take-home pay is $3,800/mo.

Where do I go from here? I'm torn between buying a home to build equity or continuing to pay rent. I live in a fairly LCOL area, but I don't have 20% to put down on something that I'd be happy with while maintaining an EF and 3-6 months worth of bills. I hate to do it, but I'm thinking I should stay in an apartment for the next couple years or so...and just maybe I'll save a larger down payment...or get married one day and which might help with the home ownership cost. Quite frankly, I feel like I've made ok progress and am very grateful, but I'm just exhausted trying to figure this out!

I think you're doing fine.

On the rental: Do you like being a landlord? If so, you might be able to look into a refi to drop the mortgage so the property generates a profit.

[LivingAlmostLarge]

Congratulations on the improvement! Like seeing updates.

[tripods68]

Being single, you can cut more on spending and expenses, "live like a broke college student" if I were you.

The more opportunity to cut on other things, the more money you will save.

-Cut the cable down to bare with antenna
-Get Netflix/Hulu cheap
-Reduce 300 grocery bills down $200
-Bring lunch to work
-create a "side hustle"

Thing about establishing a purpose, a goal. List all the things you want to achieve to start with.

[~bs]

youre saving roughly half your take home pay, I think you're doing fine.

what's the breakdown of your current bills? I'm assuming $1400 or so is for mortgage/rent. If all spending excluding that is only $600/month, I'm guessing you already cut it down enough that is reasonable.

----

Keep building your savings. When the economy turns (ina few months or few years, who knows?), you'll be in a good position to buy.

[cologero]

Thanks for the feedback everyone. I'll answer the astonishing few questions here.

Q: Do you like being a landlord? If so, you might be able to look into a refi to drop the mortgage so the property generates a profit.
A: My rental is an hour away and occupied by a family member so there's basically nothing I do. I tried a refi a few years ago and was told by 2 banks that's I didn't have enough equity. Sucked because it gave me 2 hits on my credit report. I'm probably going to resist this again in the spring.

Q: -Cut the cable down to bare with antenna
-Get Netflix/Hulu cheap
-Reduce 300 grocery bills down $200
-Bring lunch to work
-create a "side hustle"
A: Cutting my cable would only be $50/mo. in savings. I want to be frugal but not like a broke college student. I work too hard and want to have some enjoyment in life. I try to keep my groceries to $50/wk nowadays. I bring my lunch to work 99% of the time. Unfortunately, I work too many hours to get enough another job.

Q: What's the breakdown of your current bills?
A: -$850 Rent
- $400 Church
- $150 Utilities
- $125 Cable/Internet
- $100 Phone
- $45 Gym
- $75 Car Insurance
- $240 Car Payment

[cologero]

Thanks for the feedback everyone. I'll answer the astonishing few questions here.

Q: Do you like being a landlord? If so, you might be able to look into a refi to drop the mortgage so the property generates a profit.
A: ...I'm probably going to resist this in the spring

Ugh...stupid auto correct. On those words bolded, I meant.
Not astonishing...not sure what I meant to put there
Not resist but revisit.

[terri77]

Looks like you're doing a great job, congrats!

[cologero]

Hellllooooo again everyone!

Quick update. Bought an awesome condo over the summer and was fortunate enough to put 20% down! Current situation at 39 years old is:

$19K in Savings
$27K in Roth IRA
$10K in Trad. IRA
$45K in 401K (contributing 9%/$800 per mo. incl. match)
$4K in HSA

Take home is $4K/mo. and expenses are now roughly $2,500/mo. leaving me $1,500 in disposable income per month.

My 2018 goal is to try amd get rid of my car payment (I owe $9K at 2% and it's worth $23K). That's pretty much my only bill outside of the "fixed" bills like mortgage, HOA, utilities, insurance, etc.

Question, there are some major uncertainties with my job now which makes me nervous. Should I still take $5,500 from my savings and fund my Roth in Jan (it's fully funded for 2017)? If possible, I'd prefer to go all-in or nothing in Jan.

Hope all is well with everyone on this forum!