We receive money questions for the More Than Money podcast. Below is a question and response. If you have a money question, you can ask it here.

Question from Randy:

Hey Art. I am going through the 8 Money Milestones and have a question. When do I start saving for the down payment on a home? We are on Money Milestone 4 and would really like to purchase a home. I assume it is before Money Milestone 7, since Money Milestone 7 is to pay off your mortgage. Thank you for your work.

Response from Art:

Congratulations! You’ve reached Money Milestone 4. That means you’re giving generously (Milestone 1), have saved $1,500 for a minor emergency (Milestone 2), and are receiving your full employer match on retirement contributions (Milestone 3). Well done. These are big wins, and they set a solid foundation for your financial journey.

Now, let’s talk about buying a home.

You're right—purchasing a home comes before Money Milestone 7, but it should come after Money Milestone 6, the emergency fund Milestone. The emergency fund is critical. While homeownership is a great blessing, it also comes with new responsibilities—and new expenses.

When something breaks (and it will), there's no landlord to call. You're the landlord now. A busted water heater, a roof leak, or a broken AC unit can quickly become expensive surprises, and if you don’t have an emergency fund, it can lead to debt. I’ve been there. I’ve had the water heater break. I’ve had to pay expensive AC unit repair bills. And I can tell you—it’s much easier to face those challenges when your emergency fund is ready.

So, here’s the encouragement—make sure Money Milestone 6 is in place before you buy the home. It’s a wise move that will help you stay out of debt and protect your ability to give generously.

And one more thing—before you make the leap into homeownership, ask yourself these three questions:

1. Will I live there for five years or more?
2. Will my monthly payment (including principal, interest, taxes, and insurance) be less than 30% of my take-home pay?
3. Can I put at least 20% down?

If you can say “yes” to all three, you’re likely in a great position to buy. When that time comes, purchase a home you can afford, and then work hard to pay it off quickly. Homeownership is a long-term strategy to free up future cash flow.

Thanks again for your question, Randy. You're doing great. Keep going!