Where to put money to reach our goal?

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singk44
Posts: 8
Joined: Thu Dec 17, 2015 10:15 am

Where to put money to reach our goal?

Post by singk44 » Fri Apr 20, 2018 11:15 am

Hi all. My wife and I just recently got married, and are combining our finances and are trying to figure out the best way to save to reach our first big goal which is buying a house. Looking for advice on where to keep our money, in terms of how much should we keep in money market vs. bond or stock funds.

Background:
His age: 27
Her age: 28
Location: Southern California
Likely cost of house: approx $600,000 (expect 20% DP -120K)
Goal: Have enough saved to buy house in 3-5 years

Finances:
Emergency Fund: $9,000
Debt:
Him - $7,000 left on car payment; no school loans.
Her - No car payment or student loans
Pay $2,100 in rent each month


His salary: $70,000
401(k): $18,000 (10% + 4% match)
Roth IRA: $17,000 (maxing yearly, will most likely need to switch to traditional this year since over the income limit)
Vanguard Money Market: $16,700
Vanguard Total Stock ETF - $5,500

Her Salary: $144,000 (fluctuates - sales but pretty consistent currently)
401(k): $29,000 (maxing it out)
Roth IRA: $5,500
Traditional IRA: $6,100
Vanguard MM: $4,500
BoA Checking: $17,000

Together we have about $52,000 in liquidity with the rest being in retirement accounts. What I am wondering is how should we consolidate our money so that it is not scattered in all these different funds, and which funds should we be investing in so that we get the most out of our money to buy a house in 3-5 years. We are currently just under 50% of our goal of a downpayment. I would like to state that due to her job being slightly more fluctuating in pay, we would like to save around $140,000 before thinking about a downpayment so that we have a larger emergency fund.

Any help is appreciated, thanks so much!

magicrat
Posts: 266
Joined: Sat Nov 29, 2014 7:04 pm

Re: Where to put money to reach our goal?

Post by magicrat » Fri Apr 20, 2018 11:25 am

1. If you need the money in 3 years, CDs.
2. Consider Backdoor Roth if you have no IRAs with pre-tax money and want to keep funding the Roth. Could also increase 401k contributions in lieu of traditional IRA.
3. Emergency fund seems light.

singk44
Posts: 8
Joined: Thu Dec 17, 2015 10:15 am

Re: Where to put money to reach our goal?

Post by singk44 » Fri Apr 27, 2018 7:06 pm

Thanks for the input...bump for more suggestions or does everyone agree with the first response

ExitStageLeft
Posts: 147
Joined: Sat Jan 20, 2018 4:02 pm

Re: Where to put money to reach our goal?

Post by ExitStageLeft » Fri Apr 27, 2018 7:24 pm

You could consolidate all the individual taxable acounts in one or more joint accounts. I would probably set up a joint account at Fidelity or Schwab and use it as the core account. Feed a separate checking account if necessary, on an as-needed basis. Other BH posters have reported that puchasing CDs is easy with Fidelity, especially if you want to roll them over as they mature. Not sure if that's the case here. Two-year or three-year CDs lok good right now.

And yeah, $20k is light for emergency fund. Your call of course, but if you can wait til you have a bit more that's good. Once you own a house the EF is much more critical.

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