You should build when you form the first complete color group.
You should build when you can do so and still be left with enough cash to pay a "high probability" expense - namely, rents on Railroads or Utilities, Luxury Tax, and the "nasty" unexposed Community Chest or Chance cards. $150 to $200 is all the cash you need to hold onto if there are no other complete color groups against you. $300 to $400 in cash is recommended if there are one or more complete color groups developed against you.
My wife always likes the "doggie"... but I gotta tell you, when you're playing the game on the floor... and you accidentally lean, or step on the doggie... the doggie really hurts.... ya know?