The more I look at rates, prices, the current affordability aspect of America, I do believe it’s time to revisit the aspect of doing a minimum 5%. You can do any amount technically that you want to put down, it’s just some programs have a minimum. If you have 7% down for what you’re seeing on Zillow, you can absolutely do that, and should if you’re financially ready. You can put any percentage down too if you decide it’s financially best for you to wait a few years and but say 12-15% down. What works best for your finances is when it’s best to buy. Yes, there are better markets than others and “buying the dip” certainly works well in real estate but it also needs to be when your finances are in a good place. Those factors need to coincide for it to be the right time to buy for you.

I know I sound like a broke record but I’m a huge believer in getting a high yield savings account and just putting money away. You don’t need a reason to save except to save. One day, your car is going to die. You might have an expensive medical issue in your family that’s going to pile on debt. You might want to have another child or begin a family. Maybe one day you’d like to go back to school if you can afford it and the kids are a little older. Maybe you’d like to buy a car in cash, even used, but you have no money. Even if you need tires one day, aren’t they so expensive and hard to afford because they go out at the worst times? Doesn’t it rent, then pour when you need sunshine the most? That’s why you need reserves.

So how do you build reserves on a very tight income? I always tell my clients to start with $25 per week or $50 per paycheck if you’re paid bi-weekly (every two weeks). Many people say they can’t even afford that, but, I know from experience, to do it. I have been there too. I spent many years not being able to afford the electricity and getting service shut off multiple times, only being able to pay part of the bill so I did to at least keep it on when I could. I was so sick of being broke and realized I needed to make a change. I figured if I’m already struggling to pay or can’t pay, I might as well struggle a tiny bit more but because I am putting money away. I walked or took the bus when I could to save on gas, or carpooling with coworkers. I got more frugal with not turning lights on, unplugging anything not in absolute need to be plugged in, stopped even turning the TV on, and opened the windows for a breeze instead of turning the fans on and learned to live with my AC not as cold as I wished. I saved A LOT or what was a lot to me at the time. I stopped with Netflix even way back then, lowered my interent plan, and cut the cable. All of those savings I added up. I think it was around $237 which was lifechanging at the same because I barely had $2.37 to my name, let alone without the decimal. I decided to put $200 of my paycheck contributions into my 401k in addition to the already $50 they autoenrolled per paycheck. They were matching our contributions at the time so I was getting the full amount. Years later when I left, I had a down payment for a house because I totally forgot about that account!! So did my husband. We built wealth from there with our condos, then houses. But to get started, it was those small amounts per paycheck changing everything and we didn’t even realize. It wasn’t a sacrifice it was the only reason we weren’t broke today.

Nowadays I know about tax implications of pulling out your 401k and filing that on your returns so now I know to just open an HYSA and put that money in. Don’t touch it! Let it rise like sourdough bread and see how it changes your life. Are on the same trajectory to be broke 5 years from now? Then get an HYSA and put money in it. You in 5 years will be a lot happier. Even if you don’t want to buy a house then or decide to wait another few years, you have a nest egg just to keep growing. One day you’ll have it for an emergency, a bigger downpayment so your mortgage will be smaller and easy to handle, or you won’t have to work until you’re 80. If you are hoping to buy a house one day, I would shoot for at least 5% down and remember that a starter home still works like a badass bank account to make you money in another 5 or so years, even better than an HYSA, and no asshole landlords to deal with! Don’t focus on buying your dream home but an improvement over what you have that you own and will grow your networth so when you sell, you get what you paid, and then a whole lot more. It’s better than renting for that reason alone but ONLY if it doesn’t stretch you too thin.