A High Cost of Living is Making it Tough to Save and Invest—Use These Practical Tips to Stay on Track

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A recent Wells Fargo survey shows that nearly all Americans want to save in 2026, but doing so is proving harder than ever.

Being able to save is one of the core pillars of real estate investing. Amid a cost-of-living crisis, more people are finding it harder to accomplish.

“The findings tell us that when people feel in control of their money, it has a positive association with self-care, happiness, and freedom for most people, even though about half are at odds with spending versus saving,” said Chris Starr, Wells Fargo’s head of deposits. “But life happens, and many adults can’t cover a financial surprise. A clear plan to manage spending and save where you can lowers stress and puts you in control of your money.”

Unrealistic Expectations

The problem many real estate investors face is that we are bombarded with hard-to-duplicate success stories—people who were working low-paying jobs who found a seller willing to hold the note and then found others, and before you know it, they were amassing doors and cash flow.

While that might be possible, many of these stories, in my opinion, set a dangerous precedent because they involve high risk and leverage, and for every such story, there are many more that end in financial disaster. What many of these stories fail to explain is that attaining the doors is one thing, but holding on to them when you are highly leveraged is another.

Far more common and realistic are stories of real estate investors who kept their steady, decent-paying full-time jobs, amassed some savings, and invested cautiously, with a buffer of cash on the side to help them overcome inevitable obstacles as they built their portfolios. Now that saving money is harder than ever, investing safely in real estate is becoming more difficult. However, that doesn’t mean it cannot be accomplished with discipline and sensible investing strategies.

A Reality Check

Before launching into saving strategies in today’s market, these are the realities that savers are currently facing.

The cost of living has increased in all areas

Bloomberg: Overall inflation has cooled, but Americans still pay about $126 today for what cost $100 before the pandemic, with the biggest jumps in costs of groceries, housing, utilities, and car insurance.

Renters are cost-burdened

Harvard University’s Joint Center for Housing Studies: For current renters looking to save for a down payment on a small multifamily dwelling, it often feels as if you are facing an endless uphill battle. In 2024, nearly 23 million renter households spent more than 30% of their income on rent and utilities—nearly half of all renters. Cost burdens have risen in 44 states and 88 of the 100 largest metro areas over the past five years.

Monthly mortgage payments have doubled

Yahoo! Finance: Citing analysis from Strategas, Yahoo! Finance reports that the average monthly mortgage obligation has “more than doubled” in just over five years as higher interest rates, with increased house prices (not to mention taxes and insurance), pushed typical payments over $2,600 by April 2025.

Greater amounts of money are needed for a down payment

Bloomberg: Goldman Sachs economist Elsie Peng estimated that a couple now needs about 70% of their annual household income to afford a standard (20%) down payment on a median-priced home, up from 58% in 2019.

Practical Ways to Save

As real estate investors, we have always prided ourselves on thinking creatively about financing, using techniques such as subject-to, seller financing, rent-to-own, private money, DSCR loans, etc. It’s easy to get caught up in the hype of these work-around solutions instead of having to dip into your pocket for a big down payment.

What is often overlooked is the fact that, as an investor, you still owe the monthly mortgage payment, and chances are it is a lot higher than if you financed conventionally (unless you inherited a low rate). In an age when everything else is going up, leaving yourself with small margins and little cash on the sidelines is not wise.

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It’s fine when using OPM for the down payment, as it allows you to keep hold of your savings for emergencies. The problems arise when you are using OPM because you don’t have any savings to start with.

One way to save more money is to take a holistic view of your expenses. Here are some ways to do it.

Cancel subscriptions and memberships

Rather than waiting for costs to drop, a more practical solution is to carve out investable cash from your existing budget, which, admittedly, is easier said than done.

MarketWatch experts suggest taking a holistic look at all your expenses, including recurring costs such as streaming services, app fees, subscriptions, and unused memberships. If you have a specific target, look to eliminate or at least downgrade it. 

Individually, it might not sound like much in your quest for mortgage money, but collectively it can add up, especially if you have your eye on an FHA loan with a 3.5% down payment.

Save on healthcare

CNN reports that millions of Americans are facing higher premiums and out-of-pocket costs as the Affordable Care Act costs expire. Shopping around for plans, using employer benefits, and effectively avoiding medical expenses where possible can free cash for a down payment and reserves.

Pay down debt

Unless you have a firm handle on your debts, they have an annoying habit of increasing. Before investing, put your savings toward eradicating bad debt, such as credit card, student loan, and store card debts. By doing this, you have effectively kick-started your cash flow by boosting the amount of money left in your pocket at the end of the month.

Increase income

Here’s another heading that falls into the “easier said than done” category. However, there are practical ways to do this that don’t involve driving an Uber through the night or working side jobs at Starbucks and Home Depot—although these are excellent ways to get healthcare coverage plus extra income if you have the time.

Live somewhere cheaper

You don’t have to emigrate to Cambodia to accomplish this, though living and working remotely can certainly turbo-boost your ability to save. Other, less drastic measures include taking in roommates or short-term rental guests, or moving in with your parents or family members to help you save money. Alternatively, you could choose to become a short-term tenant in a room in someone’s house rather than renting an entire apartment.

Look for practical side hustles

Rarely does a day go by that I don’t see an influencer telling me how they made millions of dollars online by working five hours a week in their shorts and flip-flops by a beach.

As tempting as it is to try to go down that rabbit hole of easy cash, the safer bet is to do something where the money is more guaranteed. It might not be glamorous or very well paid, but it’s not forever, and when done alongside everything else, the goal is to get you to that first down payment faster. 

Nerdwallet breaks down some no-nonsense ways to get your money right.

Final Thoughts

The strategy of lowering expenses and increasing income is from the school they knocked down to build the new school. However, as vintage as it is, it still works. If you plan to invest in real estate in the current high-expense era, having sufficient cash is a must.

Put the blinkers on and don’t get sidetracked by the “I was delivering pizzas a year ago, and now I’m making $100K in cash flow a year” stories because you are setting yourself up for a big fall, even if you have lenders or private money willing to back you. You still owe the money, tenants are still liable to skip paying rent, and repairs will inevitably need to be done. 

So focus on the hard work of saving cash and explore the joys of eating beans and rice a few times a week. It’ll be worth it in the long run.