Howdy all,
Some background: I'm debt free and getting the full match in my employer's 401k, plus some extra into a Roth IRA (totaling ~11% of my income towards retirement). I've got 6 months' expenses in a liquid emergency savings account.
My question is about the leftover income I'm currently adding into a goal oriented savings account. I'm in my late 20s and saving for a wedding, a house's down payment, and a car to replace the one I have now. I'm not seriously involved, happily renting, and my car is a 2008 (paid off). That is to say, the timeline for these savings are in the moderate future (all estimates):
* three years for the wedding at a goal of $10k to pay for my half of a $20k budget
* five years for the house at a goal of $12k to pay for my half of a 20% down payment on a $125k house
* eight years out of my car before replacing it with some late model used for around $15k or less
My question is this - with these goals in mind, and this timeline, is investing in the market a smart strategy for my savings contributions?
Currently, I'm socking away ~$400/mo towards each of these goals into an online savings account (earning 0.8% interest), is a fast enough rate to hit each of these goals in turn. However, with inflation, what is now a $15k car may be more by the time I'm ready to buy. A rate of return above what a savings account can offer would help battle inflation and potentially increase my savings even faster. I was looking at the Vanguard's LifeStrategy funds, as I don't yet have sufficient funds to invest in both a total stock fund and total bond fund ($3k minimums each at Vanguard) and I believe it could give me a bond heavy distribution of investments in one place.
If not, is there a place besides my "high" interest online savings account that I could put this money until I needed it?
Many thanks.