Hello, all! I am new this board and to personal finance in general. I am currently working on my emergency fund but don't know where to go next.

Basics
Age: 25
Single
Salary: $49,000
I live in a medium/large size city.

Debts
No debts. I do have a credit card that I pay off every month

Assets
401k - $6,717.67 (I contribute 7.5%, my employer matches that but does not contribute until the end of the year)
Roth IRA - $1,764.30
Paper savings bongs - approx. $400
HSA - approx. $3000
Car (paid off)
Emergency fund: $4100

Goals
Increase emergency fund to $4500
Save $1400 to purchase a lifetime membership to the organization that supports my main hobby

My monthly bills (rent, utilities, gym, cell phone, insurance) add up to about $1000/month. My budget for food, entertainment, clothing, gas, other "wants" adds up to another $1000/month.

I started building my emergency fund in March and have been impressed with how quickly it has been about to grow. I know I will be able to easily accomplish my two goals by the end of the year. My question is, what's next? I would like to start saving for a house down payment but do not envision actually wanting to commit to that for at least 5 more years. What is the best way to save for a down payment/what did you do?

Seems you are doing great?!

Saving for down payment within five years = no risk. Personally, I would go for a savings account with best possible interest.

Another thing; who takes care of your retirement money? Fees of just 0,4-0,6% more than you have to pay is big bucks over the next 40 years! Low fee is the key. Target funds with fee <0,3% is great for passive savers.

When I was your age and started working, I automatically put $50 dollars a month in a mutual fund that I thought would be good. That way I was earning some extra money, but it was for the future. It wasn't necessarily earmarked for anything at that time, and I just accumulated and accumulated.

When it came time for me to buy a house, I had enough in there to remove it for part of a down payment. Now that I'm older, I still have about 9k in that account, and it's STILL not really earmarked for anything, it's just another savings pile.

If you wait 5 years, you may have other things that you want to buy, and may overspend, so it's good to have a little pile of cash for when you need it, but not necessarily for emergencies.

My point is, save now, and figure out where it goes later because the older you get, the more likely you'll want to spend on whatever, and won't have it. Keep up the good work!

Weclome to the forum.

I agree with NL looks like you are doing fantastic

I agree also with Peachy tuck some away every month in a mutual fund. I tried to put 50-100 a month minimum when I was starting out.

Out of curiosity is 4500 3-6 months worth of your monthly expenses?

Next step might be to max out your Roth IRA contributions?

Out of curiosity what is your main hobby?

Thanks for the replies.

Eagle -

My bills, rent, etc. add up to $1000 a month. Then I figured an additional $500 each month for food, gas, etc. for a 3-month emergency fund. I could live even cheaper than that if I fell on really hard times as there is some cushion in that (food is my biggest non-bill expense and I have a really nice bike and commute that way most of the time anyway, plus I have a very solid social support system).

My main hobby is barbershop singing! That $1400 would mean I wouldn't have to pay the $90 yearly fee to our international organization. I plan to be a 50-year member so I figure it will pay for itself

I will look into mutual funds - my work has financial advisers I can meet with. I might need to do that as I have no idea what I'm doing. I just contribute to a retirement account that was recommended based on my age.

I would like to have some money in places where I can access it before retirement age because I would really like to explore the possibility of retiring early or at least partially retiring.

Update:
My emergency fund will be at my goal on Friday when I got paid! Woohoo!
Then I get started on my $1400 goal. I don't think that will take long and imagine I'll get there before my Dec. 1 goal.

Then: On to down payment saving!

My boss is on maternity leave right now so I am taking over some of her duties. In return, I got a temporary 10% raise. Woot! Excited to see what that looks like on my paycheck.

I need to look for other ways to make some extra money. I have a ring to sell but I don't really know the best way to go about selling jewelry. That would go a long way toward that $1400 goal.

Sounds like fun!



Remember: Diversify, diversify, diversify. Don't stick all your eggs in one basket. Consider a Roth IRA, Bonds, and saving up for a home purchase.



Looks like you're on the right track! And a raise is fantastic! How long is your boss going to be out?

How old is your car? How many miles are on it? Have you started saving for repairs/replacement of this vehicle?

My boss will just be out for a few months so the temporary raise will equate to just about $1000 or so. It is a good opportunity to show my capacity, as well. I work for a non-profit and "bonuses" don't really happen around here.

My car is a 2006...I think...with about 75,000 miles on it. I really don't drive it much - I mostly bike. I maybe drive 50-100 miles a week, at most (depending on how far away my quartet rehearsal is). Some weeks I don't drive at all (I like those weeks ). If my car broke down I would seriously consider just being car-free. It would take some changes but would definitely be possible and a fun challenge . I should probably set aside some money for new tires, though...I live in a snowy area and they are kinda important.

Challenge yourself - get rid of the car and save the money until you really need a car.

Well, I did fully fund my emergency account! Yeah!

I have started saving up for my lifetime membership - $400 in that account so far. I think I should be able to save the rest in September - $500 from each paycheck would do it.

I have been working on losing weight (lost ten pounds in August!) and find it sort of hard to work on both things at once...

I was your age and began working, I instantly put $50 dollars monthly in a common finance that I believed would be good. That way I was generating some extra cash, but it was for the long run. It wasn't actually reserved for anything at that time, and I just gathered and gathered.