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What comes first? The home or the retirement account?

After 13 years of marriage and renting, David Teicher, 34, and his wife decided to take a break from retirement saving so they could buy a home. It had always been a goal of theirs, but they needed a little more free cash to make it happen.

Teicher, who is the chief content officer at Brand Innovators, a NYC-based marketing events company, said they’d always been diligent about saving for retirement. They contributed to their 401(k) plans and talked to their accountant about budgeting and a financial plan that would allow them to save for retirement and also buy a home. “But that was not necessarily feasible as we decided to ramp up the house hunting,” he said.

Having to choose between saving for a home and saving for retirement is not uncommon, especially among young adults. Millennials, who are between 25 and 39 years old, don’t necessarily view the two as equal goals, according to Canadian real-estate company Zolo, which surveyed 1,800 people. Saving for a down payment was a top priority for more than a third of participants, followed by debt repayment, an emergency fund, retirement saving and then travel. Of that list of five priorities, almost half of respondents marked retirement savings as fourth or fifth in line.

As such, millennials are willing to scale back how much they contribute to a retirement account if it means they can buy a home sooner. Almost three-quarters of survey participants said they would postpone saving for retirement in lieu of a home. Some said they wanted a home for permanence and stability, others said to start a family and build wealth. More than six in 10 people said they planned to buy a home in the next five to 10 years.

Typical financial advice may suggest contributing to a retirement account and also a savings account for a down payment, but not everyone has enough funds to do both, on top of the other living expenses they have to pay for (like current housing, utilities, food and student loans). “It is fairly common that people have more goals than resources, especially at the beginning of their careers,” said Howard Pressman, partner at EBW Financial Planning in Vienna, Va. As with most other financial goals, young adults will have to find a balance, he said.

Alyssa Davies, content specialist at Zolo and personal finance blogger at Mixed Up Money, changed her lifestyle to give herself the freedom to save for a home. She and her husband recently had a baby, but still found ways to decrease their expenses and increase their income (mainly by working multiple jobs, she said). She also urges others to look into down payment assistance, which can help qualified home buyers put money toward their home or closing costs.

First, individuals should assess how they currently spend their discretionary income — anything that is not a necessary expense — and then split that amount into present day spending and saving for the future. “It may mean frugal living for a few years, but it’s worth it in the long run,” Pressman said.

Teicher said he thinks their home purchase will be worth it, and expects their home to contribute to their finances come retirement. “It does become difficult. You have to make that ‘either, or’ sacrifice,” he said. “But I adopted the mentality that this house is a retirement plan, or part of it in some ways. “ The couple may decide to sell the house after 30 years and downsize, he added.

For those still strapped and unable to put away money for both lofty goals, it’s OK to prioritize home buying over retirement spending for a short while, Pressman said. “But know that as soon as your house savings goal is met, savings needs to be directed back to retirement and that you may need to increase savings even more later in your career to make up for the lost years,” he said. Saving as early as possible may not equate to a lot of money in contributions, but it is lucrative eventually, what with compound interest of assets and their investment returns.

There are a few caveats, though. Real estate is becoming increasingly expensive, even for starter homes, so workers may want to focus on retirement accounts and put any extra savings in a high-yield savings account to use for a home when prices decrease, said Laura Nickolay, a financial adviser at White Oaks Wealth in Minneapolis. “You’ll have gotten far more bang for your buck,” she said.

Before all else, potential home buyers should prioritize an emergency savings account first, said David Haas, a financial adviser at Cereus Financial Advisors in Franklin Lakes, N.J. “You should have enough savings in an emergency fund to deal with things like temporary job loss or having your car die without needing to take on more debt or miss bills,” he said. “There’s no point saving for retirement or saving for a down payment if you can’t come up with a couple thousand dollars for unexpected required expenses.”

After buying a home, the expenses don’t stop. In addition to the mortgage, there’s maintenance and taxes, and those will continue on even after the mortgage is paid off. Thus, there should be a clear financial plan set out before any purchase, advisers said.

“If you can’t afford to do at least some retirement savings while you are saving for your first home, you will most likely find yourself ‘house poor’ and unable to save for retirement for some time after you purchase the house,” said Scott Bishop, partner and executive vice president of financial planning at STA Wealth Management in Houston. “Have a good and realistic budget of all the costs to own a home and see if you can save for retirement.”

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