I eluded to this in a prior post, I think I'm ready to seriously consider buying a home. Why now? Well, because I live at home (which is GREAT) but I'm tired of fighting for freezer space with my mom.
(tangent)Please tell me why a house with three people needs TWO stoves, TWO refrigerators, and one full sized freezer? Better question: WHY, in the name of all things right and glorious in the world is every crevice in these fridges and freezers PACKED?? I need answers.
And another thing, why is a loan for a mortgage based on your gross income? That seems rather faulty to because not all of that is spendable. Why aren't loans based on income after taxes, deductions, etc.? I don't understand that.(/tangent)
So anyway, yeah. I'm ready for my own space where I can store my meals in peace. Below are some of my thoughts on savings preparation:
1. I'm using the idea that one shouldn't buy a home that is more than 2.5 times their current salary. For me, I can't go beyond $125,000.
2. I'd like to find a place for less than that, however I am going to base my down payment savings on the above, so my goal is $25,000.
3. I'd also like to have some money for furniture, etc. If I find the right spot in the burbs it must be within a 5 to 10 minute drive to public transportation. In that case, I would need to buy a car to get me there. It would be a safe, used, no-frills car.
4. Based on my current salary and saving habits, it's possible for me to save $38,400 in two years, $40,000 if I stretch. Again, I'm not taking salary raises into account (the cost of health care/inflation renders it moot anyway).
5. I'm going to scrap the "Computer Fund." Instead, once my Unemployment Fund goal has been reached, I will increase my savings by $1,200.
6. So by the end of 2008, I will have a total of $8,400. $6,000 will be used to fund my 2009 Roth IRA*. The remaining $2,400 will be used for a new computer...and that will have to include a monitor.
7. Speaking of Roth IRA, my 2010 contribution will have to come out of #4 somehow. But I'm hoping my raises will be enough to take care of that.
8. If I'm still in a long-distance relationship next year, I'm covered by way of travel...kinda. Provided United Airlines doesn't go out of business or decide to mess around with their loyalty program, I have enough flyer miles right now for 6 or so round-trip tickets. As far as this year, well...I do have a travel fund and I'm planning to try out Megabus.
9. I'm in no rush to buy a home. It's not something I feel I absolutely NEED to have right NOW so I'm will to wait and save. Ideally, I'd like to be in my home between two and three years from now.
10. In all of this, is very important to me to be able to fund my retirement, especially after I get a home.
So that's what has been on my mind lately.
*Starting in 2009, Roth IRA contributions will be indexed by inflation in $500 increments. I have no idea how that would work, so I'm just guesstimating that it will go about another $1,000.
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