Your goal is a $250,000 home purchase and you would like to put down 20% or $50,000. You have decided that you will look for a home in the Bronx because it has the lowest median home prices in NYC. You found a two-bedroom co-op for $250,000; the co-op maintenance (HOA) is $978 per month (this fee includes the real estate taxes).

You would like to achieve this in the next five years, so you need to save $10,000 per year. Currently you earn $40,000 per year and save $4800 a year. See this article for a sample budget and assume that for our purposes, the $400 listed as debt repayment each month is actually being applied to savings (the debt was paid off).

Looking at the sample budget, it seems that saving $10,000 may not be doable.

What are your options to resolve this savings shortfall? Be as creative as you like, but your suggestions here and elsewhere must be grounded in reality.

Now let's assume that you have in fact saved the downpayment. Use the mortgage calculator and assume that you will put down 20% on the apartment described above, and that you will get an interest rate of 3%. Be sure to click on Purchase not Refi at the bottom of the calculator. Homeowners insurance is $1000 annually (putting down 20% will mean that you will not pay any PMI, which is mortgage insurance), you still however need homeowner's insurance.

What is your total monthly payment?

If the bank requires that your annual payments (mortgage and co-op maintenance fees or HOA) be no more than 28% of your pretax income, what amount of income do you need?

(Monthly payment x 12 months)/.28 = _______________

If the amount of required income is more than you are making in this scenario (the $40,000) what are your options?

Lastly you have decided that you need to invest your savings in the stock market and believe strongly in asset diversification. You are going to put your money in either an ETF or mutual fund. Since you plan to invest an amount automatically each month, you have decided on a mutual fund. Pick one Vanguard fund, tell us the name of the fund, provide a link to the fund page; tell us why you choose that fund, the expense ratio, the minimum opening investment, and what the average annual return for the fund for the last five years (do not pick a fund that is less than five years old).