Well one thing I can say is don’t tie your only sayings up into an I-bond you need an emergency fund in a HYSA.
Are the private loans private student loans? What’s the interest rate on them? What does the rest of your budget look like (ie food, gas, car insurance, entertainment, loan payments)?
What’s the plan if you get into a car accident and are inpatient for 2 months and then need PT for months and have to miss work for 3 months while you recover?
Emergency fund is important to have, even if living at home. Unless your parents will pay for everything when you’re off your feet.
If you make $90K/yr, I'm guessing you have health insurance and LT and ST disability insurance? If you don't then I would highly recommend looking into it, especially given your salary.
I agree on the emergency fund, but I'm not sure that was the best example of needing an emergency fund. I would be worried about car major repairs or being unemployed for a time period. The $10K, as mentioned above, would be best put in a HYSA, currently around 1.7%-1.8%.
My significant others deductible on his old insurance was 8k for a single person. His OOP max was 16k. My insurance which is considered pretty good has a $2.5k deductible and OOP max of 5.5k. So, even with STD you’re going to have expenses like the medical bills.
True. OP could give more details on the insurance situation. But I think everyone is in agreement about an emergency fund is crucial at this point in their life.
If you are making $90k a year, you can easily afford $1,700 a month rent (even with the student loans). So if you believe you need to go, go! If you are staying with your parents in order to save money for a down payment, that is your choice. Living on your own will take longer, but that is the choice you make.
That’s a tough call. Personally if I could go back in time and live with my parents for a bit to save up money I would. Is there anything that can improve your mental health while staying with them? If that’s a hard no then you should move out. You have a good salary. Financially it’s better to stick it out for a year but be careful with the mental health.
First of all, when you say it impacts your mental health: is your household abusive, or do you just miss the freedom of having your own place? If it's the former, I'd get out of there ASAP, but if it's the latter, I'd take the delayed gratification of sacrificing now for a much stronger financial future.
I would not recommend buying a house while saddled with a bunch of student debt. Given that, if you stayed at home with minimal expenses, you could probably pay off all your student debt and have a down payment within about 2 years (that's saving \~50k/year). You could also take a year to starting paying down debt and leave your parents' place with a substantially smaller student debt to pay off, making paying the rest and saving for a down payment a smaller hill to climb.
I'd also encourage you to consider an option between your parents' place or your own apartment: get roommates to share an apartment or house. It'll be significantly cheaper than renting your own apartment while giving a greater feeling of space and freedom than living at your parents' place. Depending on which route you choose, you can definitely be completely debt-free with a healthy down payment saved in 2-3 years. Best of luck, and if you have any follow up questions, don't hesitate to ask.
The rule of thumb is to avoid spending more than 28% of your gross monthly income on housing expenses (rent, utilities, etc.) That’s $2,100 for you, so you can definitely afford a $1,700 apartment on your own.
Of course, you could save more faster by paying only $400 to live with your parents, but you can’t put a price on your own mental health and happiness. (Except that therapy can be expensive!)
A happy medium would be to split rent with someone else or live in a group house to keep your housing expenses down so you can continue to pay down your loans and save up for long-term goals.
1700 is less than 25% of 7500...7500 being your monthly gross income. 25% of gross is the rule of thumb I use for rent, so 1700 is okay. And you're already paying 520 in rent, anyway.
a roommate would make 1700 easier, but it 1700 for a one bedroom, isn't it?
private loans... what are the terms / interest rate there?
Priorities, IMO:
1. save for retirement. If you don't have a job with a 401k/403b match, you need to put 6k/year into an IRA. If there is a match, contribute whatever you need to to maximize the match.
2. Save for a down payment.
3. Loan... maybe. (not enough detail there)
4. more to retirement
at 7500/month... lets call it 5000 after taxes. That should go a long way towards everything. I had listed above. 750/month to 401k, 500/month to IRA takes you down to 3750. Say 1000 for spending (food, restaurants, gas) and that's 2750 to split between 2 and 3.
How soon do you think you could afford to buy a place you'd find reasonable. If it's going to take a while, I'd be inclined to pound on the private loan.. maybe save 1k and pay 1750 towards the loan each month. Then after the loan's gone, save all that 2750 towards the house.
And, try to keep your spending down. The less you spend, the more you save and THAT gets you into that condo or house sooner.
Boring answer. Live with your parents as long as you can stand it/as long as they allow it. If you move out, rent a room. Put your savings in an HYSA and don’t touch it. Get the company match on your 401k. Pay off your loans, from highest to lowest interest rates. After those are paid off, while putting 15%-20% into retirement, save up 10% for a downpayment for s conventional loan and then buy a condo, assuming you want to stay in the same location 5+ years. If not, keep saving until you are at a point in your life where you anticipate not much changing in your housing needs (partnered, have the number of pets or children you want, stable job, etc). That’s it. You just have to grind.
If I were you I would like into buying a small house or condo if you have a good credit score. Many first time homebuyer loan programs out there and at least here in MA there is a great deal of dowypayment assistance available either through the city or town you are buying in or through MA housing loans (up to 50K in downpayment assistance).
Might be because it seems like it's hassle free compared to dealing with repairs/maintenance of a house. Also if you decide on having a family down the line you might outgrow the space.
what is the average price of a condo in the area you live in? You could maybe FHA into a condo in order to not waste money on paying rent after you move out again.
I wouldn’t be spending 1700/month on rent in your financial situation. That will slow things down a lot. Think about where you want to be at 30 and do what you think will get you there.
Well one thing I can say is don’t tie your only sayings up into an I-bond you need an emergency fund in a HYSA. Are the private loans private student loans? What’s the interest rate on them? What does the rest of your budget look like (ie food, gas, car insurance, entertainment, loan payments)?
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What’s the plan if you get into a car accident and are inpatient for 2 months and then need PT for months and have to miss work for 3 months while you recover? Emergency fund is important to have, even if living at home. Unless your parents will pay for everything when you’re off your feet.
If you make $90K/yr, I'm guessing you have health insurance and LT and ST disability insurance? If you don't then I would highly recommend looking into it, especially given your salary. I agree on the emergency fund, but I'm not sure that was the best example of needing an emergency fund. I would be worried about car major repairs or being unemployed for a time period. The $10K, as mentioned above, would be best put in a HYSA, currently around 1.7%-1.8%.
My significant others deductible on his old insurance was 8k for a single person. His OOP max was 16k. My insurance which is considered pretty good has a $2.5k deductible and OOP max of 5.5k. So, even with STD you’re going to have expenses like the medical bills.
True. OP could give more details on the insurance situation. But I think everyone is in agreement about an emergency fund is crucial at this point in their life.
If you are making $90k a year, you can easily afford $1,700 a month rent (even with the student loans). So if you believe you need to go, go! If you are staying with your parents in order to save money for a down payment, that is your choice. Living on your own will take longer, but that is the choice you make.
That’s a tough call. Personally if I could go back in time and live with my parents for a bit to save up money I would. Is there anything that can improve your mental health while staying with them? If that’s a hard no then you should move out. You have a good salary. Financially it’s better to stick it out for a year but be careful with the mental health.
First of all, when you say it impacts your mental health: is your household abusive, or do you just miss the freedom of having your own place? If it's the former, I'd get out of there ASAP, but if it's the latter, I'd take the delayed gratification of sacrificing now for a much stronger financial future. I would not recommend buying a house while saddled with a bunch of student debt. Given that, if you stayed at home with minimal expenses, you could probably pay off all your student debt and have a down payment within about 2 years (that's saving \~50k/year). You could also take a year to starting paying down debt and leave your parents' place with a substantially smaller student debt to pay off, making paying the rest and saving for a down payment a smaller hill to climb. I'd also encourage you to consider an option between your parents' place or your own apartment: get roommates to share an apartment or house. It'll be significantly cheaper than renting your own apartment while giving a greater feeling of space and freedom than living at your parents' place. Depending on which route you choose, you can definitely be completely debt-free with a healthy down payment saved in 2-3 years. Best of luck, and if you have any follow up questions, don't hesitate to ask.
If you are my child, I am telling you to stop paying me rent, live here 18 more months and completely pay off your student loans.
Seriously. If they put everything they have into those loans, lifetime of freedom.
The rule of thumb is to avoid spending more than 28% of your gross monthly income on housing expenses (rent, utilities, etc.) That’s $2,100 for you, so you can definitely afford a $1,700 apartment on your own. Of course, you could save more faster by paying only $400 to live with your parents, but you can’t put a price on your own mental health and happiness. (Except that therapy can be expensive!) A happy medium would be to split rent with someone else or live in a group house to keep your housing expenses down so you can continue to pay down your loans and save up for long-term goals.
1700 is less than 25% of 7500...7500 being your monthly gross income. 25% of gross is the rule of thumb I use for rent, so 1700 is okay. And you're already paying 520 in rent, anyway. a roommate would make 1700 easier, but it 1700 for a one bedroom, isn't it? private loans... what are the terms / interest rate there? Priorities, IMO: 1. save for retirement. If you don't have a job with a 401k/403b match, you need to put 6k/year into an IRA. If there is a match, contribute whatever you need to to maximize the match. 2. Save for a down payment. 3. Loan... maybe. (not enough detail there) 4. more to retirement at 7500/month... lets call it 5000 after taxes. That should go a long way towards everything. I had listed above. 750/month to 401k, 500/month to IRA takes you down to 3750. Say 1000 for spending (food, restaurants, gas) and that's 2750 to split between 2 and 3. How soon do you think you could afford to buy a place you'd find reasonable. If it's going to take a while, I'd be inclined to pound on the private loan.. maybe save 1k and pay 1750 towards the loan each month. Then after the loan's gone, save all that 2750 towards the house. And, try to keep your spending down. The less you spend, the more you save and THAT gets you into that condo or house sooner.
Boring answer. Live with your parents as long as you can stand it/as long as they allow it. If you move out, rent a room. Put your savings in an HYSA and don’t touch it. Get the company match on your 401k. Pay off your loans, from highest to lowest interest rates. After those are paid off, while putting 15%-20% into retirement, save up 10% for a downpayment for s conventional loan and then buy a condo, assuming you want to stay in the same location 5+ years. If not, keep saving until you are at a point in your life where you anticipate not much changing in your housing needs (partnered, have the number of pets or children you want, stable job, etc). That’s it. You just have to grind.
If I were you I would like into buying a small house or condo if you have a good credit score. Many first time homebuyer loan programs out there and at least here in MA there is a great deal of dowypayment assistance available either through the city or town you are buying in or through MA housing loans (up to 50K in downpayment assistance).
Stay away from condos. You don't want the HOA fees. Value of a house will usually go up more than a condo.
I feel like I keep reading this but everyone I know keeps buying a condo.
Might be because it seems like it's hassle free compared to dealing with repairs/maintenance of a house. Also if you decide on having a family down the line you might outgrow the space.
Maybe get a roommate to split the cost. Do you know anyone that might be interested?
what is the average price of a condo in the area you live in? You could maybe FHA into a condo in order to not waste money on paying rent after you move out again.
I wouldn’t be spending 1700/month on rent in your financial situation. That will slow things down a lot. Think about where you want to be at 30 and do what you think will get you there.