investor1 wrote:1. Get your EF where it needs to be (in your opinion)
2. Max out retirement accounts (compounding interest is the bomb!) - 401(k) and IRA
3. Start saving for a down payment on a house. Figure out how much you would like to spend on a mortgage payment add extra for insurance, property taxes, increased utility costs, maintenance and repairs. Basically, figure out how much owning a home will cost you each month. Once you have that figured out, save at least that amount for your down payment. You should probably adjust your EF with these costs in mind (in other words, consider these current expenses so your EF is in good shape by the time you purchase).
4. Save for the inevitable. Car maintenance, repairs, and replacement. Example: Say your cars last around five years and the next car will cost about $12k. Add extra for maintenance and repairs of the current car, say about $3k. That's $15k divided by five years (or 60 months) which means you should be saving $250 each month. There are other (non-car) expenses which are inevitable, so apply this concept to those things too.
5. You are young and likely healthy now, but that won't last forever. You should be saving for future health care costs. People with low medical expenses are excellent candidates for a HDHP which gives you access to an HSA.
6. Travel and enjoy life
If your parents are okay with you living at home and you enjoy being there, stay there. I'm sure they would like it if you contributed to the bills and managing some of the household bills now will give you experience doing it for when you own your own home.
Padlin wrote:Now that you're debt free I think it's time you get out of your parents house. They need to start preparing for the rest of their lives.
sdubz wrote:Would it be a good idea to just throw any extra money after investing and EF into the VTSMX vanguard fund I have? (ie house down payment, car repairs, new car, etc.)
Rick Ferri wrote:If you save $1,000 per month for 25 years, and earn 7% on that money including the $35,000 you already have saved today, you will have over $1,000,000 by the time you're age 50.
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