Buying a home is a milestone worth celebrating. But your feeling of accomplishment won’t last if you move in and have little money for anything but maintaining that roof over your head.

That’s known as being house poor, and it can create long-term financial stress and take a serious bite out of your ability to enjoy the home you worked so hard to afford. Read on to learn what it means to be house poor, the potential impacts it can have on your life, and the steps you can take to avoid — or recover from — this financial strain.

Being house poor means you’re spending so much of your income on housing costs that there’s not much left for anything else. These costs include things like your mortgage payment, utilities, homeowners insurance, and general maintenance. If these expenses gobble up most of your monthly income, you could struggle to pay for other living expenses, like groceries and gas, or building an emergency fund — even if you’re earning a good living.

Being house poor doesn’t necessarily mean you’re mismanaging your personal finances. It can result from buying more home than you can comfortably afford (thanks to high home prices and interest rates), underestimating the costs of homeownership, or losing your income because of a job loss or other life event.

Here's an example: Say you and your spouse bought a $500,000 home with a monthly mortgage payment of $3,200. You had no problem qualifying for the mortgage thanks to a solid income. After closing, however, paying for all your monthly needs on top of your house payment, day care, utilities, groceries, and credit card bills maxes out your budget. One additional expense, like an unexpected repair, could leave you struggling financially.

Here are some warning signs that your budget is stretched to the max.

• Being a homeowner is stressing you out. You constantly worry about money, repairs, or what would happen if you or your partner got laid off.

• You’ve stopped saving. Your emergency, retirement, and vacation savings have fallen by the wayside.

• You’re relying on credit cards. If you’re using credit cards to cover basic expenses like groceries and utilities, that could be a red flag.

• The idea of an emergency expense is terrifying. Whether it’s a car repair or a medical bill, the thought of unexpected expenses can feel like a major bummer.

Financial stress piles up in other areas of your life, impacting your health and leading to mood swings, poor sleep, or even serious conditions like depression or high blood pressure. And don’t discount the loss of discretionary spending — having funds for hobbies, travel, and small luxuries like a date night is an important stress-release valve.

You don’t have to check all the boxes above to be house poor. Experiencing one or two of these stressors could mean it’s time to reassess your housing costs.

The best time to avoid becoming house poor is before you reach the closing table. Some careful planning and conservative budgeting can help ensure your dream home doesn’t become a financial nightmare.

Being a savvy homebuyer will go a long way to making you a comfortable homeowner. Find a real estate agent who knows the local real estate market inside and out so you don’t end up with a money pit that needs a ton of unexpected repairs or floods in every rainstorm. Take steps to shore up your financial situation to help in the borrowing phase: saving for a sizable down payment and building up your credit score, which will help you qualify for the best home loan terms and keep your monthly payment manageable.

Just because a lender approves you for a certain amount doesn’t mean you need to spend it all. It’s nearly impossible for lenders to factor in things like your personal spending habits, savings goals, and the little luxuries (coffee, anyone?) that make you feel secure and content. A good rule of thumb? Keep your housing costs under 28% of your gross monthly income.

Your mortgage payment is only part of the housing costs picture. Be sure to factor in additional expenses like homeowners insurance, property taxes, homeowners' association (HOA) fees, and general maintenance costs each year. A home inspection can help flag structural issues that could become major expenses down the line.

Make sure your total housing costs leave room for saving, investing, and the creature comforts that bring you and those you love joy. A slightly smaller or lower-cost home could offer some much-needed financial space to invest in your family and future.

Online house affordability and mortgage calculators can help you run the numbers to find your ideal housing expense sweet spot. You can also find online budget calculators to get a clear picture of what you can reasonably afford and what might stretch you too thin. Debt-to-income ratio is a metric many mortgage lenders (and smart budgeters) use to assess how much house you can afford.

If you feel like you might have already reached the house-poor tipping point, don’t panic. These steps can help you de-stress and regain control of your finances.

Take a hard look at your budget and find areas to potentially trim. You could consider a debt consolidation loan to lower payments on high-interest debts like credit cards or limit streaming subscriptions to free up cash for housing expenses.

Consider gig work, part-time jobs, or even renting out a room in your home to bring in extra cash. Even short-term boosts to your income can provide a financial cushion.

If rates have dropped or your credit has improved since buying your home, refinancing your mortgage could help lower your mortgage payment. Be sure to factor in closing costs before deciding on this solution.

If your home has become too much of a financial stress, consider selling and moving to a more affordable space or even renting for a while. It’s a major decision that could bring a sigh of relief and help build long-term financial stability.

Talking to a financial advisor or housing counselor could bring clarity if you're overwhelmed. HUD-approved housing counselors offer free or low-cost guidance on budgeting, mortgage relief programs, and foreclosure prevention. You can find a counselor near you through the U.S. Department of Housing and Urban Development’s website.

"House rich, cash poor" refers to people having a large amount of equity in their home, either because they’ve paid the mortgage down over the years or the home’s value has appreciated quickly since they bought it. But home equity is illiquid — meaning it’s not easily accessed. So if you’re house rich but need cash for an emergency or to pay down debt, a home equity loan or line of credit can be a useful tool.

The biggest burden on homeowners is rising housing expenses beyond their mortgage, including insurance, property taxes, home maintenance, and utilities. Research from Harvard’s Joint Centers for Housing Studies found that these expenses have increased at a faster pace since the pandemic.

According to the most recent data from the American Community Survey from the U.S. Census Bureau, 38.8% of owner-occupied units are mortgage-free, while 61.2% have an outstanding mortgage.