If you plan to continue to rent, then I'd suggest investing the money for the long term. Personally, I'd put it all into an index fund (have you maxed out both your IRAs this year?). If you feel you you want to be diversified into real estate---buy an REIT or possibly an investment property (some location where the numbers make more sense).
If I do decide to rent for the next few year at least, it seems like it would be a good idea to be building up some of my savings in a way that could eventually be used to buy a house without penalty. For example, I would like the opportunity to take advantage of any future housing market downturn. I guess that means I should be at least maxing out a Roth IRA each year. I also read that I could take $10k out of a Traditional IRA for a down payment, so maybe I should put put $10k in one of these too. Any other methods of keeping the funds accessible but sheltered?
Side question: what are "Shares"? If that's savings, along with "401k" and "Surplus", then you are saving 29.1% of your income!
This is an amalgamation of publicly traded stock I have acquired, partly through an ESPP. I believe the best plan for these is to sell each batch as the year expires in an attempt to redress the imbalance they create. I decided not to count the surplus in the my savings rate because it's currently only a projection, but point taken :-)
At first glance almost everything looks high to me, but especially your food costs of $1833 / month (Groceries + Dining Out) and $1833 / mo Misc (Shopping + Cash + Other).
Yes, a quick search shows a the grocery cost comes out as "
a liberal plan"! That should be an area of focus, including weeding out some mis-reporting (Costco can be bad for this). 70% of 'dining out' was one particular coffee chain. My wife is
addressing that, so hopefully the projection will turn out to be wrong. 'Other' in includes my subcategories 'Children', 'Relocation', 'Life/Disability insurance' and 'charity'.
Also, if you rent, what is $3k / year for "Home"?
$1k is furnishings, the rest is renters' insurance and all the other stuff for which a landlord isn't liable - gardening, pest control, cleaning, maintenance etc.
I would suggest running a rent vs buy analysis over 5 year time period. Include expense and maintenance in your calculation.
Also, thanks for all the advice. I agree that there's a definite non-financial return to be considered in home ownership. I'm coming to the conclusion that it would be a good idea to continue to rent for a while whilst trying to build up a fund which could be used for a house if the stars happen to align later on. Maybe this is the 'middle way'.
