“I’ve seen solid returns in the stock market, but should I put my savings towards a large down payment?” How can I make the most of my financial situation while planning for a home purchase?

Hey Money Minder,

I gotta say, things are looking pretty good for me right now. I’ve been killing it in the stock market lately, and even took some risks that paid off big time.

So, here’s the deal – I’m 25, holding it down as the breadwinner for me and my wife while she’s grinding through dental school. Just landed a new job making $55k a year, and we’re thinking about buying a house soon, around May.

Right now, I’ve got $110k stashed away in a high-yield savings account, $15k in my brokerage account, and another $6k in savings. Plus, I’ve managed to save up $20k between my 403b and Roth IRA. We’re eyeballing houses in the $250k range, and I’m wondering if it makes sense to throw most of my HYSA cash into the down payment. I should also have another $9k-12k saved up by May.

Our only debt is a car loan with $250 monthly payments, but there’s only $8k left on it. I’m thinking about paying it off early, but not sure if that’s the best move.

Would love to hear your thoughts on this!

Catch you later,
Financially Savvy Fred

Response from THE MONEY MINDER:

Hello There,

Congratulations on your new job and the financial stability you’ve achieved at such a young age! It’s commendable that you’ve been able to save and invest wisely, especially considering your responsibilities as the sole provider for your family.

Given your current financial situation, it seems like you’re in a good position to purchase a home in the $250k range. Putting the majority of your high-yield savings account funds towards the down payment could be a wise move, as it can help you reduce your mortgage amount and potentially secure a better interest rate.

It’s also great to hear that you’re considering paying off your car loan early. Eliminating debt is always a positive step towards financial freedom, and it can free up more of your income for other priorities, like saving for your wife’s dental school expenses and future investments.

Overall, it sounds like you have a solid financial plan in place. Keep up the good work with saving and investing, and make sure to continue reassessing your financial goals as life circumstances change. Best of luck with your home purchase and your wife’s dental school journey!

All the best from THE MONEY MINDER.