Is Buying a Home the Ticket to Financial Freedom?

Tracking 'the Latte Factor'

Even though they have a nest egg of $10,000, Bach advised them to take a hard look at their spending, especially at Greg's specialty beer collection.

"I teach people to look at what I call the 'latte factor,' because it helps to find money. We all spend money on little things, like lattes at Starbucks or bottled water or cigarettes, eating out," he said.

Next, Bach met Bambi and John Norris. They live in a rented home outside Fresno, Calif., with their two children. Bambi is a schoolteacher and Jason sells tires. With a combined salary of $40,000 — less than the national average — the Norrises are a bigger challenge for Bach. Although the Norrises are eager to have a place of their own, it's an uphill battle as they struggle to pay the bills every month.

When Bach visited, he took one look in the kids' rooms and immediately discovered their latte factor: their son's video games and their daughter's pricey hobby, beauty pageants.

"I'm not trying to take all the fun out of your life here, but just cutting that back would probably be a difference between a $150,000 home and a $200,000 home," Bach told them.

It was a welcome and important dose of reality for the Norrises.

"My stomach hurts to think of all the money that we've put into games and silly things that we could do without," Bambi said.

Bach says saving money is serious business if you want to buy a home. The Norrises have only $4,000 in savings, just a drop in the bucket in the pricey California market especially because they have big dreams.

They're hoping for a home with three bedrooms, a good-size garage and nice yard.

Aim for a Starter Home Before a Dream Home

Bach has a bit of a reality check for the Norrises and Kenyons.

"Here's the truth. You can't buy your dream home first. You have to get your starter home. And often your starter home is not going to be as nice as what you rent. In fact, in most cases, you have to go backward in the real estate game to go forward. You have to make a sacrifice. And that's the hardest hurdle for many people," Bach said.