Comments on: Down Payment Saving: Five Steps to Save For Your First Home http://www.moneyunder30.com/down-payment-saving-five-steps-to-save-for-your-first-home Personal Finance for the Young and Ambitious Sat, 21 Nov 2009 04:23:03 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: real estate portal http://www.moneyunder30.com/down-payment-saving-five-steps-to-save-for-your-first-home/comment-page-1#comment-1222 real estate portal Sat, 13 Dec 2008 06:21:08 +0000 http://www.moneyunder30.com/down-payment-saving-five-steps-to-save-for-your-first-home#comment-1222 A simple thing that you can do is pay yourself first. Select an amount you wish to save per month/year/week/etc.. and break that down into paychecks or other time goal. Then on that interval, move that dollar amount over. For example, I selected a target amount to put into savings and divided that amount over 24 pay periods in the year. Then 1 day after each pay period I have a recurring deposit made into my savings account. This way I can ensure I’m getting a better interest rate (in my case my Savings > Checking interest) and I’m also automatically saving for the future. A simple thing that you can do is pay yourself first. Select an amount you wish to save per month/year/week/etc.. and break that down into paychecks or other time goal. Then on that interval, move that dollar amount over.

For example, I selected a target amount to put into savings and divided that amount over 24 pay periods in the year. Then 1 day after each pay period I have a recurring deposit made into my savings account. This way I can ensure I’m getting a better interest rate (in my case my Savings > Checking interest) and I’m also automatically saving for the future.

]]> By: Money Under 30 http://www.moneyunder30.com/down-payment-saving-five-steps-to-save-for-your-first-home/comment-page-1#comment-1221 Money Under 30 Tue, 01 Jul 2008 02:41:00 +0000 http://www.moneyunder30.com/down-payment-saving-five-steps-to-save-for-your-first-home#comment-1221 Good question, Yackie. Unfortunately you can only take penalty-free distributions from IRAs for first-time, up-front home purchase expenses, not a 401(k) or other employer-sponsored retirement account. (Don't ask me why; I have no idea). Of course, anytime you change jobs you can rollover your 401(k) into either your new employer's 401(k) or to a traditional IRA. So your question illustrates one reason you might want to roll over your funds to an IRA. Some people take money from their 401(k) to buy a home anyway, but end up paying the price: a minimum 20% federal income tax and 10% early withdrawal penalty. You could also <a href="http://www.moneyunder30.com/how-to-take-a-401k-loan-and-why-you-shouldnt" rel="nofollow">take a 401(k) loan</a> to fund your down payment, but that's not the best idea, either. Good question, Yackie.

Unfortunately you can only take penalty-free distributions from IRAs for first-time, up-front home purchase expenses, not a 401(k) or other employer-sponsored retirement account. (Don’t ask me why; I have no idea).

Of course, anytime you change jobs you can rollover your 401(k) into either your new employer’s 401(k) or to a traditional IRA. So your question illustrates one reason you might want to roll over your funds to an IRA.

Some people take money from their 401(k) to buy a home anyway, but end up paying the price: a minimum 20% federal income tax and 10% early withdrawal penalty. You could also take a 401(k) loan to fund your down payment, but that’s not the best idea, either.

]]> By: Yackie http://www.moneyunder30.com/down-payment-saving-five-steps-to-save-for-your-first-home/comment-page-1#comment-1220 Yackie Mon, 30 Jun 2008 17:18:35 +0000 http://www.moneyunder30.com/down-payment-saving-five-steps-to-save-for-your-first-home#comment-1220 What about using the money in a 401k? What about using the money in a 401k?

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