Dear Penny: Should We Use 90% of Our Savings to Buy a Home?

Dear Penny,
It sounds like four options are on the table: holding out for the “right house” in the city, the cheaper home in the up-and-coming neighborhood, a condo or staying where you’re at.
Buying your dream home doesn’t buy you your dream life. You could buy the perfect home in the city you love. Yet life will still be boring if you can’t afford to experience big-city life because housing costs are draining your budget.
My boyfriend and I are both 34, have been together 10 years, and make about ,000 a month together after taxes. I contribute 5% of my annual pay to charity. We have no other debt except my student loan debt from graduate school, which should be paid off in three years. 
Also try to be realistic about what city life would look like for you. Visiting a place is a lot different from actually living there. If you’re homebodies now, a move to the big city probably isn’t going to transform the two of you into a pair of jetsetters.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
Ready to stop worrying about money?

I don’t think you should use 90% of your savings to buy a home. That’s not to say using 90% of savings for a home purchase is always a bad move. In fact, in today’s overheated real estate market, spending a large chunk of savings is the only way many people will become homeowners. But I doubt that the ,000 you’d have left would be enough for the recommended six-month emergency fund. The fact that spending gives you anxiety makes me think you should proceed cautiously.
It’s true that buying a home is an investment, and real estate tends to be a good investment over time. But more importantly, your home is a place to live. Focus more on what you want out of life first and less about the future resale value.
Also, most of the homes are outside of our price range in this city. We can’t decide if we should buy a condo, which we don’t like the idea of, wait for the right house, or buy a cheaper house in an up-and-coming neighborhood. I am worried a condo won’t have good resale value, or even be impossible to sell. Should we buy a second home? Should we buy a condo or keep trying for a house in our budget? 
The condo is easy to rule out. You doubt its value as an investment, plus it doesn’t sound like you want to live in one.


About four years ago, we bought a small, inexpensive single-family home near where we work. The home was less than what we could afford, so that we could save and eventually move back to a city we both love that is very expensive. We intended to keep the house and rent it out when we moved, as a way to diversify our investments. 
Dear Unsure,
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In the past 10 years that we have been working, we have been able to save about 0,000. I am thinking we should use 90% of our savings to finally move to the city. I am nervous that if we wait, we will be priced out again due to high home costs, rising interest rates and inflation. 
So that leaves you with two choices: moving to the up-and-coming neighborhood in the city or staying put. I can’t tell you which is the better option for you. It boils down to whether you crave stability and connection over the novelty of a new city.

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