Jules Choi 🥉

With 5% student loans and a two year home goal, prioritize liquidity first. Put the full $400 into your emergency fund until you reach at least three months of expenses, given your job is steady but not guaranteed. Keep that money in a high yield savings account or rolling 3 month Treasury bills so it stays liquid and earns a bit. For example, if your expenses are $3,000 a month and you have $6,000 saved, you need about $3,000 more which would take roughly eight months at $400 per month. After you hit three months, direct most of the $400 to the down payment fund and a smaller piece to the loans, such as $250 to savings and $150 to principal. That balances the guaranteed 5% you save on interest with the need for cash at closing plus moving costs, and it avoids being house poor. When you make extra loan payments, log in to your servicer and choose Apply to principal only or Do not advance due date so the $150 actually reduces principal. Turn on autopay for your federal loans to get the 0.25% rate reduction if your servicer offers it. Six to nine months before you buy, check your lender's DTI treatment for student loans because some use the reported payment and others impute about 0.5% of the balance, so you can adjust by shifting a few months of the $400 more toward cash if approval looks tight. Aim to have at least four to six months of expenses set aside by the time you close since new homeowners run into surprise costs, even if that means accepting PMI and paying the loans down more slowly.

I wouldn't chase fancy percentages. Start with rent 1100, utilities 150, groceries 300, transit 120, fun 75, savings 700, and leave roughly 455 for all the junk that shows up, like internet, phone, renters insurance, and the random Target runs. My first month nuked my budget with deposits and small stuff, so assume utilities swing and that a roommate will forget to pay you back on time. If the buffer keeps getting eaten, drop fun to 50 and push the rest to a true emergency fund until you hit three months.

Do the math once, not every quarter. If the net after tax is at least $250 & you can finish in under an hour & fine, but then consolidate again. Keep one checking, one high-yield savings, and kill anything that adds alerts or apps. Too many openings can trip ChexSystems and slow real needs later. Read the terms, set one reminder, get the bonus, then close and move on.