I’m a sophomore in college, and I earn about $1,500 a month at my job. My rent is $500 a month. I don’t really have a credit history, but I’ve saved $20,000, and I’m thinking about using it as a down payment on a $140,000 home. Would this be a good idea?

- Gil

- Dear Gil,

I wouldn’t do it. I love the fact that you’re working while you’re in school. Saving that much money is fabulous, especially for someone who’s not even 20 years old!

I almost did the same kind of thing when I was in college. I was into real estate, and I really wanted to test my wings and buy something. Looking back on it, though, I’m glad I didn’t. It would have been a huge mistake. College can be a bumpy enough ride, even for the most responsible student. If you lost your job you’d be in a real mess, and with your stated income you wouldn’t have a lot of breathing room. Plus, the two years following graduation have the potential to be the most permanently life-changing period you’ll ever experience. You could move across the country for a new job, get married, or decide to attend graduate school. In any of these situations, a house would turn into an anchor around your neck.

Being a renter is a great thing while you’re still in school. In the meantime, keep piling up cash until you’re ready to settle down!

- Dave