Not everyone’s ready to buy real estate right now — maybe you’re still saving for a down payment, maybe you’re not sure where you’ll settle down, or maybe you just want more cash cushion first.
So what do you do with your money while you wait?
Here’s what I would do to prepare financially.
Start with an emergency fund
Before you invest a dollar, make sure you’ve got 3-6 months of expenses set aside somewhere safe and liquid. This isn’t the exciting part, but it’s the part that keeps a bad month from turning into a bad year. Don’t skip it just to get to the investing. The amount in the emergency fund really depends on what you’re comfortable with. Personally, I have at least a years worth of money set aside given the variability in my job as a real estate agent. Park the cash somewhere where it earns something. I put my emergency fund in high-yields savings account so I can keep it safe and liquid, while it earns much more than a checking account.
For longer-term money, index funds are hard to beat
This is where most of my own investing has happened. I’m a big believer in low-cost index funds —like VTI and VOO. I personally use Vanguard and invest myself. You’re not picking stocks. You’re buying a small slice of the entire market and letting it compound.
Over the last 6 years, my personal portfolio has averaged 14% annually. I want to be upfront: that’s not a guarantee, and it’s not what everyone should expect. Markets go through rough years too. But it shows what staying invested, consistently, over time can do. If you have a job with a stable income, I would set up recurring transactions to invest on monthly basis so you don’t even have to think about it.
Don’t forget retirement accounts
If your employer offers a 401k match, take it. That’s free money! And if you’re eligible, an IRA is another spot to grow money tax-advantaged before it ever touches a taxable account. These accounts work well alongside a down payment fund, not instead of it. You’re building two things at once: your future and your next move.
Automate it and stop thinking about it
The easiest way to actually stick with any of this is to automate it. Set up a recurring transfer the same week you get paid, before you have a chance to spend it. You don’t need to time the market or check it daily. Consistency does more work than timing ever will.
The real takeaway: don’t just sit in cash
The biggest mistake I see people make isn’t picking the “wrong” investment. It’s leaving money sitting in a checking account, doing nothing, while they wait for the “right time” to buy real estate. Time in the market matters more than timing the market. Put your money somewhere it can work while you save toward your next move.
If you want to learn more about the home buying process, please reach out! A good real estate agent should have reliable lender contacts for you, so you’re not figuring out the financing side alone either.
This post is for informational purposes only and isn’t financial advice. Talk to a licensed financial advisor about what’s right for your situation.
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