How to best leverage savings?

[Anonymous]

Before we had a child, DH and I lived very frugally in my 1-br condo where our mortgage was very minimal. We sold the condo before DC was born and opted to rent since our ultimate goal is to move out of the area. Our rent is more than double (nearly triple!) what our mortgage was. With daycare and child-related expenses, some months we don't save much at all, and we have dipped into savings for big purchases. My question is - how can we best leverage the savings we amassed when we had fewer expenses? We have about 230k in a credit union savings account. No debt other than about 14k of low-interest student loans that we haven't paid off for any reason other than laziness. Our cars are paid for. Eventually we'd like to use this money as a down payment for a house, but in the meantime I feel like it could work a lot more for us. We're obviously not very financially savvy, so I have no idea where to start with investing. We do have a 529 for DC but again, no sure what should be the priority here. Help!

[Anonymous]

Anonymous wrote:Before we had a child, DH and I lived very frugally in my 1-br condo where our mortgage was very minimal. We sold the condo before DC was born and opted to rent since our ultimate goal is to move out of the area. Our rent is more than double (nearly triple!) what our mortgage was. With daycare and child-related expenses, some months we don't save much at all, and we have dipped into savings for big purchases. My question is - how can we best leverage the savings we amassed when we had fewer expenses? We have about 230k in a credit union savings account. No debt other than about 14k of low-interest student loans that we haven't paid off for any reason other than laziness. Our cars are paid for. Eventually we'd like to use this money as a down payment for a house, but in the meantime I feel like it could work a lot more for us. We're obviously not very financially savvy, so I have no idea where to start with investing. We do have a 529 for DC but again, no sure what should be the priority here. Help!

PAY off your loan fast. It will help your credit. Then start looking for a house. You will need 20% down payment. You also need $ for closing costs and stuff that WILL break in your house. There is always stuff to be fixed.

Make sure you still have 6 months of emergency funds saved up. If you can get a mortgage that is much less than your rent, you will be saving $.

Try to read a bunch of different financial advice books but USE YOUR BRAIN.

A "financial" planner I knew once read a book where the advice was "don't pay off your mortgage-put it in the stock market." We didn't listen to that moron and we paid off our house. Other people listened to that advice and lost their house when the housing bubble burst and lost $ in the market. A double whammy. Some people are stupid, I guess. You need a Little bit of common sense and think about if the advice you are getting really makes sense in the long run. All I know is the moron that wrote the book made a LOT of money selling bad info to people.

The old adage is true: free advice is rarely "free."

I don't know if Dummies makes a book about finance, but that would be a great place to start. (I've read their Dummies book on investing - mutual funds, IRA etc. years ago, and it was very good.)

[Anonymous]

Why the hell pay off a low interest loan, especially when the loan is small and by the sounds of it there is no other debt??? Who the heck dishes out such stupid advice?

[Anonymous]

go and see a financial advisor. dont take advice from an anonymous board.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Before we had a child, DH and I lived very frugally in my 1-br condo where our mortgage was very minimal. We sold the condo before DC was born and opted to rent since our ultimate goal is to move out of the area. Our rent is more than double (nearly triple!) what our mortgage was. With daycare and child-related expenses, some months we don't save much at all, and we have dipped into savings for big purchases. My question is - how can we best leverage the savings we amassed when we had fewer expenses? We have about 230k in a credit union savings account. No debt other than about 14k of low-interest student loans that we haven't paid off for any reason other than laziness. Our cars are paid for. Eventually we'd like to use this money as a down payment for a house, but in the meantime I feel like it could work a lot more for us. We're obviously not very financially savvy, so I have no idea where to start with investing. We do have a 529 for DC but again, no sure what should be the priority here. Help!

PAY off your loan fast. It will help your credit. Then start looking for a house. You will need 20% down payment. You also need $ for closing costs and stuff that WILL break in your house. There is always stuff to be fixed.

Make sure you still have 6 months of emergency funds saved up. If you can get a mortgage that is much less than your rent, you will be saving $.

Try to read a bunch of different financial advice books but USE YOUR BRAIN.

A "financial" planner I knew once read a book where the advice was "don't pay off your mortgage-put it in the stock market." We didn't listen to that moron and we paid off our house. Other people listened to that advice and lost their house when the housing bubble burst and lost $ in the market. A double whammy. Some people are stupid, I guess. You need a Little bit of common sense and think about if the advice you are getting really makes sense in the long run. All I know is the moron that wrote the book made a LOT of money selling bad info to people.

The old adage is true: free advice is rarely "free."

I don't know if Dummies makes a book about finance, but that would be a great place to start. (I've read their Dummies book on investing - mutual funds, IRA etc. years ago, and it was very good.)

The For Dummies series does include a personal finance book. Someone gave it to me 20 years ago, and it was one of the best personal finance books I've ever read. To-the-point and simple. Definitely get a copy. Lots of the same stuff is surely available via some website today.

I agree on most if what PP wrote, but not about the idea of always paying down mortgage. That's never a bad option, but there might be better choices. It really depends on the rate and other specifics.

[Anonymous]

I think the answer depends on when you think you are going to move out of the area and when you think you're going to buy a house. How much do you have in retirement savings? That should be your first priority.

You don't want to move the majority your home downpayment savings into stocks if you're going to buy in the next few years because you'd really be in a tough spot if the market declines.