How do people typically strike the right balance when it comes to saving for a house vs. saving for retirement?

 In Question of the Day

Question:

I am 24 and I would like to invest as much of my income as possible, but I would also like to have funds available to invest in a house sometime in the next 5 years. Regardless of budget, how do people typically strike the right balance when it comes to allocating savings?

Answer:

This is an easy problem. How much you need to buy a house divided by 5 years. Save that much for the house. Put the rest into whatever investment account.

This is after you have an emergency fund set up and your debts are paid off.

 

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