By Demetria Gallegos

Joseph and Alana Shir want to be homeowners. The question is, when is the right time to make that move?

The couple, both in their early 30s, have been living with Alana's mother near Fort Lauderdale, Fla., for the past three years. They know they are fortunate, living in a nicer area than they could afford on one income.

Joseph Shir works as an analyst for the federal government, making about $112,000 a year. He also earns about $10,000 teaching a course online. Alana Shir is home full time with their 1-year-old daughter, Jessa. The couple hopes to have another child at some point.

The Shirs don't know exactly where they would like to live, what they can afford and when to take that step, especially with housing costs being so high. And while they are short on space in their current living situation, they are reluctant to leave it.

"It's been great to have three generations in one house," says Joseph Shir.

The Shirs pay $2,600 a month on average for household-related expenses, covering a portion of homeowners insurance and property taxes, the HOA bill, utilities, lawn care and other services and repairs.

Other monthly expenses include $600 for a car lease, gas and insurance; $1,500 for groceries; and about $200 on eating out and social outings. He has a student loan with a balance of $21,000 at 4.4% interest, which has been in forbearance. Their health insurance through Joseph's work costs about $450 a month.

The remainder of their budget is dedicated to savings, with a portfolio of assets totaling more than $776,000. He contributes 12% of his salary to a thrift savings plan through his employer that currently holds $98,000. He contributes $570 monthly to a Roth IRA worth about $40,000 and $200 to an investment account totaling $154,000. She has an investment account with more than $268,000, as well as a Roth IRA worth $134,000 from her years of working in sales. An inherited IRA, which she will have to cash out by next year, has $35,000.

They add about $200 a month to a 529 college-savings account for their daughter worth about $21,500 and to which family members also contribute. The couple also has a money-market account with about $20,000, which they treat as an emergency fund.

He has a $1.5 million life-insurance policy, which costs him $140 quarterly. She doesn't have life insurance.

While the couple has been focused on saving, they also are trying to stay in the present and have fun as a young family. "We want to make sure our daughter has a great childhood while we are getting money in all of those baskets," says Alana Shir.

Advice from a pro

The Shirs have done a good job keeping expenses low and managing to save aggressively on a limited income, says Matt Parenti, a certified financial planner and partner at Private Vista, a wealth-management firm in Chicago.

But they need to do some defensive planning, he says, such as buying disability insurance in case anything happens to Joseph Shir that affects his ability to earn. He also suggests they boost their emergency fund to $50,000. And he would like to see a life-insurance policy of at least $250,000 for Alana Shir.

Parenti says a good rule of thumb is to save about 25% of income after taxes. This couple is at about 40%, he says. He recommends that their retirement savings be allocated to Roth-style accounts because Roths are funded with after-tax dollars and the Shirs are in a relatively low income bracket.

Once those issues are addressed he believes they will be well-situated to become homeowners, even in the current environment. He says they could comfortably handle a home in the $420,000 to $440,000 range, assuming a down payment of $150,000 and a 30-year mortgage rate of 6.5%. They could then refinance in the future, he says.

Parenti advises potential homeowners looking to buy within the next one to two years to build and keep down-payment funds in cash-equivalent accounts such as money markets, CDs and high-yield savings accounts. If the timeline is more like three to four years, down-payment funds could be invested in short- to medium-term bonds, he says. Beyond that, some of the money could be invested in the stock market.