Ask HN: Average savings per month?

Re:Ask HN: Average savings per month? by flexd on Tuesday June 02, 2015 @07:49AM (#9645214)

I make around $58k before taxes. Currently near 100% of that is going into a savings fund to buy an apartment. My parents generously offered to let me live in their street level basement for free until I can afford buying my own place, so I moved in last summer after I finished university. I am close to having enough money to get a loan, and I am looking for a suitable place now. Trading some of my privacy and independence at 27 years old is probably hard for some, but I have a good enough relationship with my parents that living with them is not a huge problem, even if my social life (i.e having people over) has been somewhat diminished.

This does not answer much of what you asked for though, since you are not in the same situation.

When I was in university I worked part-time, and I also got a loan&stipend from the government (as all students do in Norway). I usually made enough to save 40-50% of my income, which is why I have money saved up now. I made maybe $15k before taxes from work and got about the same in student loans. 40% of the student loans gets converted to a stipend if you pass your exams.

By the budget I have planned for when I buy an apartment, it will look something like this:

- Rent/Loan: 40%

- Groceries: 12%

- Utilities/Electricity/Stuff: 16%

And then there are probably more expenses I have not accounted for, but hopefully I will be able to save some money, but probably less than 32%

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Re:Ask HN: Average savings per month? by saiprashanth93 on Tuesday June 02, 2015 @12:12PM (#9646849)

just curious, what are your reasons for buying an apartment? I never understood why people bought homes when their parents already own a house.

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Re:Ask HN: Average savings per month? by flexd on Wednesday June 03, 2015 @03:57AM (#9651169)

I do not plan on living with my parents forever. Basically I can either pay like $1000++ per month to rent, which would be money I never see again, or if you have saved up money like I have, I can get a loan and buy something and spend about the same paying down the mortage. Money well spent, because at some point (like 25-30 years) I will own the apartment outright. Of course I will probably not remain in that apartment for the next 25 years, but it is basically an investment. There are only so many places to live in central Oslo, and the demand is always going up. And even if the market crashes and I lose a lot of money, the prices of all the other apartments will be lower as well, so I would be able to buy another place at an equally lower price.

Loan interest is very low at the moment, around 2.7-2.9%, and to counter everyone loaning way too much, you need to have 15% of the loan sum in order to qualify. I can expect to pay maybe $320k for a apartment in Oslo, depending on how big and where it is. $320k would typically be >50m2 somewhat central, or 30-40m2 very central (those go for even more). I will need to have about $48k in cash to be able to get a loan at that price.

I also have some student loans, but I have basically my whole life left to pay them off at a very low interest, so I pay like $154 every two months or something I think. It is the best interest loan I am ever going to get, so there is no point just paying it down immediately even if I have the cash for it.

TL;DR: Paying for a mortage is better than paying someone else rent, and I do not want to live in my parents basement forever.

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Re:Ask HN: Average savings per month? by saiprashanth93 on Wednesday June 03, 2015 @05:50AM (#9651520)

Cool. I guess in your case it makes sense because of the low interest rate. I didn't mean that you would live with your parents forever. What I meant was since your parent's already own a home, its already an investment by them that you are going to inherit.

I never understood why buying a home is a good investment option since ROI is very low for a very long time unless you sell the house for a higher price or you make all the money through rent, which is probably never happening considering other costs that come with owning a home.

This article makes all the point I was going to write and some more.

http://www.jamesaltucher.com/2011/03/why-i-am-never-going-to...

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