How much should a 25 year old have in savings? Are these goals realistic?
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I have plenty of savings and a stable stream of cash going into savings every month. I'll take my 15 year mortgage, pay less interest to the banks, and have freedom at 45.
And we arent talking about your mortgage rare your recommendation
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Even if you save the 30k in 5 years and decide to put it on the mortgage, you're STILL paying more interest up front on a 30 yr.
There is more interest paid but it wouldn't be 100k pre tax. It also doesn't take into account that between year 5-15 you'd also have another 60k saved up. Alternatively it doesn't take into account the possibility that you'd make an equivalent 15 payment on your 30 year
And we arent talking about your mortgage rare your recommendation
There is more interest paid but it wouldn't be 100k pre tax. It also doesn't take into account that between year 5-15 you'd also have another 60k saved up. Alternatively it doesn't take into account the possibility that you'd make an equivalent 15 payment on your 30 year
That's if your disciplined enough to save the money and pay it off in 15 years. The majority won't be
Theres probably no right answer and everyone is different. Best thing is to have a years worth expenses saved up - least for me thats what I am comfortable with. I would say your definitely ahead of most. 3 years ago when I was 25 we had about 20k saved and 7 rental properties BUT we didnt have any debt besides mortgage, neither of us had any student loans which helped us save quicker. Plus, we never drank or partied like many 20 year olds, we have always been frugal with money. Keep up the good work!
I graduated college last year and have 14k saved up. Is this a good start? I am looking to buy a house by the time I'm 30, and I live in an apartment.
You're doing great, but think long and hard about looking to buy a home that soon. Job security is out of place for our Generation, so you might have to work in one place for 3 years, move clean across the country for another job for 5 years, move clean across the country again for a job for 4 years, move back to your home state for a job for 10 years, etc., etc.
You usually buy a home when you believe you will be SET in one area for at least 10 - 15 years. With our lack of job security today, it's difficult to do that especially when your career is just starting to take off.
The reality is that our Generation (if you are financially responsible) is going to be putting off family creation until about their early - mid 30's for the most part, and putting off buying a home until around their mid 30's to early 40's for the most part, after they have created SOME sort of stability.
But yeah, at 25 with some coin saved up, you are doing better than most 25-year-olds today who don't have two dimes to rub together to make twenty cents.
The New York Times has a good calculator to help you figure out if buying/renting is a better deal.
Generally speaking, you'll break even on buying vs. renting after 3-4 years but that's if your maintenance costs are low. For most people it's more like 7 years to break even then buying starts to pay off more every year after that. A young person that is likely to move within 5 years is probably not better off buying.*
*This is all market dependent. Some markets (like mine) have seen such outrageous housing cost and rent increases lately that buying even just for a few years pays off. My property value has risen 71% in the 22 months since I bought it and it shows no sign of slowing down - it's estimated value goes up about 1-3% a month (!). Of course this is a bubble and who knows when it will pop. In my market, renters can expect their rent increases to be at least 7% per year. The duplex next door to me has gone from $650 per unit to $1000 per unit in the same 22 month period.
Other markets - central Florida and most of Missouri come to mind for me - have property values that are pretty stagnant over the last 1-2 decades, the values just barely keep up with overall inflation. Buying there will mean you lose money over time because all the money you spend on maintenance and improvements is just plain consumer expense like a car.
You're doing great, but think long and hard about looking to buy a home that soon. Job security is out of place for our Generation, so you might have to work in one place for 3 years, move clean across the country for another job for 5 years, move clean across the country again for a job for 4 years, move back to your home state for a job for 10 years, etc., etc.
I don't believe this is true exactly... 20-30 somethings have generally been more transient than older people. When you say "our" generation, you mean that age group? It isn't that we have less job security than past generations, we are just in the transition phase between school/career so people tend to move. Scaring people into thinking all of a sudden that the job market is completely different than any other generation is absurd and not true
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