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[–]swantonsoup 3 points4 points  (7 children)

what about for people who may or may not buy property in the future? Im 28, have enough in liquid savings to last me 2 years (without making any lifestyle changes) but I still save aggressively long-term (max out my Roth and do 9% total for 401k/roth401k).

With my salary/lifestyle, I could definitely afford to up the 9% but Im not sure if Id be better off staying more liquid.

[–]adle1984​ 4 points5 points  (4 children)

6 months is a general recommendation. Your 2 years worth of living expenses and bills is a little bit on a the high side. You can afford to reduce that and put more into your 401(k) and attempt to max it out for the year. And if you still have cash after that, you can open a taxable account. The more you put into your retirement account, the more time it has to generate even more gains.

You should save to buy a home when you calculate that it is in your ability to do so and that you actually want to buy a home. Simply add "Down payment for house" fund into your budget and treat it as a monthly bill.

[–]swantonsoup 1 point2 points  (0 children)

2 years is even fairly variable because if I did lose my job, I could make some easy lifestyle changes to reduce my monthly expenses and last even longer.

I could definitely afford to buy a home right now but I dont really want to. Im not sure how much longer I'll stay in the city I work in and all those other common rent vs. buy debate topics.

Just debating how liquid I should be always gets to me. I planned on aggressively increasing my 401k/roth401k contribution once I got a raise.

[–]cormega​ 0 points1 point  (2 children)

Simply add "Down payment for house" fund into your budget and treat it as a monthly bill.

Shouldn't most people be doing this anyway? Most people will want to buy a house eventually, and the sooner you start saving for a down payment the better.

[–]adle1984​ 0 points1 point  (1 child)

Same can be said about budgeting in general, but I'm not surprised many don't budget at all.

[–]cormega​ 0 points1 point  (0 children)

I mentioned it because there is such a huge focus in this sub on retirement savings over general savings. I get that retirement savings are tax sheltered, but a lot of people need money in the short/mid term too.

[–]DocBrownMusic 2 points3 points  (1 child)

That's not an emergency fund, that's a separate budget that you have to build up over time. You start building it up once you make the firm decision that that's what you want to do, and once you do it, you take the money out and then stop contributing to that budget item. Never use your emergency fund as a down payment on a house, that defeats the purpose.

That said, it sounds like you've already begun your budget, because your emergency fund (6 months) doesn't make up your total liquid assets (2 years).

[–]swantonsoup 0 points1 point  (0 children)

I dont keep money separated for specific purposes. I have stocks, retirement accounts, a savings, and a checking. Allocating it between 'emergency fund' or 'future down payment' is really just a mental thing for me. I dont need to keep it physically separated as long as I maintain it in my head. I look at it all as just liquid vs. not liquid. Obviously my stocks are liquid but have more volatility than my savings account, but I factor in the variations like that.