How much should I have in savings?

Anonymous · ‎02-27-2015

So I'm 22. Just grad college. I live at home for the time being and work full time making about $50k a year.

Within 12 months I plan to move out and live with my partner or buy a home.

I currently have about $15k in savings. My goal is to have $25k by December.

1) how much should I have as backup after I buy a home? What does a 22 yr old keep in a normal savings acct? 10% of income?

btw I have no cc debt currently. My only current bills are my car and Ins which is about $700 a month. Ugh. It sucks. Wish I didn't drive a $40k car. Not worth it.

2) any special things I can get as a first time home buyer?

myesha87 · ‎02-27-2015

I think you're on the right track. When I was 22 I had $1500 that I had in savings at all time I had a child too so that wasn't ideal. Now that I am 27 and I make a lot more money I feel comfortable with having $10k in savings at all times. When I bought my home last July I had about $26k saved up. I think you are onto something great.

SomeGuyOnTheWeb · ‎02-27-2015

Enough to live six or so months without a job if need be. IMO, anything after that is a waste to keep in savings as the returns are just terrible.

EQ - 727
TU - 752
EX - 774

hajew86 · ‎03-03-2015

Sounds like you're doing fantastic so far. I would suggest keeping 3-6 months worth of expenses in savings just in case. Also, is there ANY way you can refinance the vehicle with a credit union to lower your payment?

In addition, if you plan on buying a home and can afford to put down 20% to avoid PMI and have savings leftover, that's great. In my opinion, it's still ok to put down 10%-ish, pay a lowered PMI per month and refinance later if at all necessary. The reality is your first home should never be thought of as your "dream home" anyway. You'll most likely sell it and leap frog into your next home before you're 30.

Anonymous · ‎03-03-2015

No way to refinance as it is a lease

Anonymous · ‎03-03-2015

@Anonymous wrote:
So I'm 22. Just grad college. I live at home for the time being and work full time making about $50k a year.
Within 12 months I plan to move out and live with my partner or buy a home.

I currently have about $15k in savings. My goal is to have $25k by December.

1) how much should I have as backup after I buy a home? What does a 22 yr old keep in a normal savings acct? 10% of income?

btw I have no cc debt currently. My only current bills are my car and Ins which is about $700 a month. Ugh. It sucks. Wish I didn't drive a $40k car. Not worth it.

2) any special things I can get as a first time home buyer?

First, kudos to you having cash savings at 22 years old, most don't have 5 dollars put away (I am VERY guilty of that when I was 22). Based on a salary of 50K I would say at 25K in savings is great and a solid number for "rainy day" type stuff. If you continue to have cash each month you could put in savings I would get an IRA going and explore other investment options.

Keep it up, most don't start down the right path so early in life.

Anonymous · ‎03-03-2015

Thank you! I just started my 401k. Me and the company contribute 13% total

Anonymous · ‎03-07-2015

My House Downpayment fund is the same as my Emergency Fund. Which keeps me from dipping into and or just leaving my current job. I pumped the breaks on this years contributions so far as I was convinced by others in the forums I should start a ROTH IRA with Vanguard, trying to meet this years 5.5 max by april, which honestly, if I could turn the hands of time and be in your position with some extra cash and had someone tell me what to do, start a ROTH IRA today. Just do it.

Back to your original question, 6months of worry free living is the saying in case of job loss or emergencies. Kept in a high yeild savings like Alliant Credit Union or AMEX Personal Savings both are at a rate of .9.

Anonymous · ‎03-07-2015

If the money gets past the $25k mark this year I will be moving it to a higher interest account

Anonymous · ‎03-31-2015

@Anonymous wrote:
So I'm 22. Just grad college. I live at home for the time being and work full time making about $50k a year.
Within 12 months I plan to move out and live with my partner or buy a home.

I currently have about $15k in savings. My goal is to have $25k by December.

1) how much should I have as backup after I buy a home? What does a 22 yr old keep in a normal savings acct? 10% of income?

btw I have no cc debt currently. My only current bills are my car and Ins which is about $700 a month. Ugh. It sucks. Wish I didn't drive a $40k car. Not worth it.

2) any special things I can get as a first time home buyer?

1) Sell your car. It's too much for your income no matter how much saving you have, nobody care what you drive.

2) Saving 10-15k while living at home is too little. You should save 35-40k, cus you dont have RENT!

3) You need at least 30-50k cash in hand while having your first home. When I buy my first house, everything is perfect base on inspection, but this, that, here , there need replacement and it cost money.

Good luck