Which is more: your home equity or your savings?

Discussion in 'Budget Board' started by disneysteve, Jul 5, 2006.


Which is more: your home equity or your savings?

  1. Our home equity is higher

  2. Our savings are higher

  3. They are roughly the same

  4. We don't own a home

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  1. disneysteve

    disneysteve DIS meet junkie

    Sep 29, 2002
    As usual, I don't fit the statistics. I should be used to that by now.

    According to The Motley Fool, the equity in most homeowner's homes far outweighs what they have saved.

    That certainly isn't true for us. We are both in our early 40s and our savings are nearly double our home equity. Plus, our savings are growing much faster than our home equity so that gap will only widen over time.

    How about everyone else?
  2. MickeyMickey

    MickeyMickey DIS Veteran

    Jan 29, 2005
    If you count 401(k) and other savings my home equity is about 40% of total net worth. My house is paid off so home equity will become less and less as a %
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  4. crjack

    crjack DIS Veteran

    Mar 6, 2005
    I had to really think about it before making a selection. My first thought was automatically our savings (401k's, 529's, etc) but then I stopped to think about a typical sell price of our house so I selected "about the same" as my choice.

    In our case it's a good thing and simply a result of living in a high cost part of the country. We also just entered our 40's and started 401k's in our early 20's and college funds as soon as possible when the kids were born. We bought our house 14 yrs. ago though and live in Boston where prices are high. They've always been high and although they are lower now than they were last year the median home price is still outrageous and probably always will be.

    We don't plan to sell anytime in the near future but if we did there would be quite a bit of equity in it even in a softer market.

    Unless we move out of state for retirement we dont even factor in our home equity as part of our retirement plan so our savings has to continue to grow on a regular basis with deductions from each paycheck. Assuming we stay in the area we will always have to deal with the high price of housing in this house or another.
  5. HaleyB

    HaleyB I am not a robot

    Nov 16, 2003
    We are in our mid to late 30's.
    Our savings is more than our equity.

    I think the Motley Fool quote reflects the fact that many Americans do not save at all and live well above their means.
  6. DawnM

    DawnM DIS Veteran

    Oct 4, 2005
    Hmmm....tough question.

    How do I count this one? Equity includes the 40% we put down on this house? Then it would have to be equity I guess.

    We moved FROM Los Angeles to Charlotte so that helped considerably.

    When we were going through the homestudy for the adoption we had to fill out paperwork for "our net worth." The strange thing is that they included the full value of our home into the equation, never asking us how much we still owed on the house. I found that VERY strange.

    We do have quite a bit in retirement accounts, 401K accounts, ROTH IRA accounts, and a general savings account.

  7. Stein

    Stein DIS Veteran

    Mar 8, 2006
    Early 30's and our savings is about double our home equity, but we have only been in it since November 04. If things continue, it will only be about 2-3 more years before the house surpasses our savings.
  8. disneysteve

    disneysteve DIS meet junkie

    Sep 29, 2002
    Though the flipside of that is all the folks buying homes in recent years with 0% down so any savings would be more than the home equity. Especially with the market softening, some folks owe more than their homes are worth, thus negative equity. $1 in savings would be better.
  9. Rozzie

    Rozzie DIS Cast Member<br><font color=blue>give me a good

    Aug 3, 2004
    This is a hard one to answer for us. We put down 30% on our home, and then saw a huge jump in the market after we bought. We both however, refuse to believe our home is worth a penny more than we paid for it. (hot topic last night at neighbors, as they want to cash out now and make a easy $50K...) I think our area is over inflated, and fast becoming over built.

    So I put savings more...
  10. nowellsl

    nowellsl <font color=purple>my car finds out everytime I ha

    Dec 18, 2002
    My house is paid for so it's all equity - my savings doesn't even come close!
  11. graygables

    graygables <font color=blue>Doesn't like to discuss the Y2K P

    Mar 4, 2004
    :teacher: House pays off in 5 years, very little in savings...guess the equity wins! We are both self-employed and between gas prices and medical/health insurance costs (and raising kids) savings is on the back burner right now. I know it's not the smartest thing, but it's our life at the moment.
  12. luckofthedraw

    luckofthedraw Mouseketeer

    Jun 29, 2005
    For now, we fit the trend, but that's because we purposefully put a huge downpayment on this house, and use HELOC as a safety net. (It's that get out of debt syndrome, ya know). We've never dipped into the HELOC, but it's there if we need it.

    Our savings are catching up, but have not surpassed, our equity.
  13. isla bonita

    isla bonita DIS Veteran

    Oct 18, 2004
    We own 2 homes and both homes have gone up in value unbelievably. Our home in NE is worth 2 times what we have paid and our home in FL has gone up 50 %. Our sav. is good but not nearly that amount.
  14. arminnie

    arminnie <font color=blue>Tossed the butter kept the gin<br

    Aug 22, 2003
    If I still owned my home in Northern California my non-retirement assets might be smaller!
  15. crisi

    crisi DIS Veteran

    Feb 25, 2002
    Our home is paid off, so we have complete equity there....but with 401ks, deferred comp, stock, savings accounts, etc., our savings outstrips our home equity.

    We have been very fortunate however.
  16. FreshTressa

    FreshTressa <font color=blue>BL II - Blue Team<br><font color=

    Sep 12, 2000
    There is no way I could save the equity we have gained in our house in the past 8 years.

    Over 8 years we have gained about 300k in equity in our houses, while our savings hovers around 50k.
  17. pearlieq

    pearlieq <font color=green>They can sit & spin<br><font col

    Aug 3, 2004
    Our home equity is still slightly more than our other assets, but that should reverse in the next 1-2 years.

    We are in our late 20's and have about 40% equity in our home.
  18. BLAZEY

    BLAZEY DIS Veteran

    May 29, 2006
    We have more equity in our home according to the tax assessment we received a few months ago. I am waiting to get our June 30 statements for many of our retirement and unregistered savings. I am 28 and have been maxing out my retirement contributions since I started working 4 years ago. My DH had no saving and I got him started with RRSP (Canadian Retirement savings) and used I have used his contribution room that he has been accumulating since his teen years. I also started a new job this year and have the maximum that my employer matches deducted from each pay cheque. This just increased with the raise I got June 1. Yah!! :cheer2: We have no kids so we are puting the max in to our retirement and then putting the extra into unregistered investments and liquid savings (ING). We have a Vacation account which doesn't get used enough in my opinion (DH is not a traveller). and I am saving for when I am off work when we decide to have kids.
  19. disykat

    disykat DIS Veteran

    Jun 5, 2000
    We bought our house 8 years ago and will have it paid off in about 5 years. It has more than doubled in value during that time. Because of that, we have way more equity in our home than savings. If it hadn't appreciated, we would have more savings than equity.
  20. dvcgirl

    dvcgirl DIS Veteran

    Nov 1, 2002
    Our home is paid for, so it's all equity. Still our retirement accounts far surpass what our home is worth. We don't fit the mold either....
  21. Lisa loves Pooh

    Lisa loves Pooh DIS Veteran

    Apr 18, 2004
    Our home outpaced our ability to save that amount. It tripled in value since we bought it 6 years ago.

    Saving that amount in the same amount of time IMPOSSIBLE! Hubby doesn't make enough annually for that to be a liklihood and unless we did some highly risky investments to pull of a ROR (umm--gambling!!!!!)...no way could we save that much.

    He invests pretty well in his 401K and it hasn't even caught up yet.

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