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the calm before the storm
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the calm before the storm
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Compound interest for a 401k is great no doubt. After taxes, other withholdings, and expenses it can definitely be hard to save. I'm not sure what advice others can provide here but in any case something will either have to give in your lifestyle or you'll have to try to make more $. Personally at your point in your life I may not try to save for a down payment just yet, but it depends on what kind of realistic goal you're going to have with regards to how expensive your home will be.
Yes, that said I would probably skew closer to 3x than 4x as most of the time whatever the list price is you will need to outbid other people and have enough to do so on top of cover closing costs, and inspection. Not to mention you would want to furnish if you don't have anything though at that point I would suggest not taking out loans for furniture or paying in installments which can come with a fee
Mentor
If you dont already, get a roommate. Or leverage WFH to live in a LCOL area.
The first time I had ever lived without a roommate was when I bought my first home. I was able to save quickly for the down payment because I always previously had roommates and would put my monthly savings in a separate savings account
401k up to the match, the rest in hysa for down payment
Mentor
I couldn’t afford a 20% down payment on my own when I was single... but when I got married I found out my wife had been saving up already! 🏡💰
Mentor
On a more serious note, I had to sell stocks in order to pitch in for the down payment, and this triggered capital gains tax that I owed the following tax day... just keep capital gains taxes in mind if you have to sell anything from your brokerage acct
Figure out when you want to buy and how much you want to out down.
Put in at least enough money to hit the match. Then figure out how much per year you need to save up to have enough for the down payment. Then put any extra money into the 401k.
My recommendation is to save up for the down payment aggressively and quickly so you can get back to putting the money in retirement accounts that will benefit from the extra time to grow.
But don't stress about it. Sounds like you're ahead of 90% of Americans.
Coach
What does your monthly budget look like? Is there items you can decrease your spending. To be honest, if a home is something you are serious about, it won’t be the end of the world if you don’t max out your retirement account for a year.
Yeah I definitely can decrease my spending on eating out and traveling. Was more just curious how people approach balancing saving cash and investing
As much as you can in the 401k account. When the time comes, take a loan from the 401k, assuming your plan allows for it.