dave says1KENTUCKY (12/8/13) – This week Dave discusses 'The baby timeline' and 'Keep the emergency fund where?'

Dear Dave,
I’m in the military, and my wife and I have $13,000 in the bank along with $35,000 in a Roth IRA. We also have no debt, and we put $3,500 into our savings account each month. Our new baby is due to arrive in January, so do you think this would be a good time to buy our first home? - Tom

Dear Tom,
Based on the market alone, it’s a great time to buy a house. Interest rates are fantastic, and prices are recovering but still buyer-friendly. However, considering your wife’s delivery date and the fact that it takes a while to find and complete the process of buying a home, I think I’d wait on this. Moving is stressful enough under normal circumstances, but combining that with a pregnancy could shoot your wife’s stress levels into the stratosphere. I really don’t think you want to do that to her. And speaking as an old married guy, it’s something you don’t want to experience, either.

Another thing to consider is if there’s a good chance you’ll be reassigned in the next four or five years. We work with the military a lot, and that means we see people who buy, and get stuck with, homes all over the country. These places usually become rental homes because they don’t sell quickly. And this is a situation you want to avoid because being a long-distance landlord is a real pain.  

If everything falls into place, you could easily have enough set aside for a big down payment a few months after the baby arrives. At that point, things will feel a little more settled. I know the temptation is great right now to move into a place you can call your own, but you want buying a home to be a blessing, not a curse. Take a little more time, and see how things feel career- and family-wise in a few months. That’s my advice. - Dave

Dear Dave,
Is it better to keep your emergency fund in a certificate of deposit or a money market account? - Tiffany

Dear Tiffany,
Right now, a short-term certificate of deposit (CD) pays about the same as a money market account. The problem is you’re only going to make about 1 percent with either one. The good thing about a money market, though, is that there are no early withdrawal fees attached.

In my mind, an emergency fund isn’t there for the purpose of making money. It needs to just sit safe and sound until it’s needed. It should also be in a program where it’s easily accessible and there are no stupid fees or penalties for simply using your own money.

So, yeah, savings interest rates right now are aggravating. But you don’t have 3- or 4-percent-home-mortgage world without a 1-percent CD world. They kind of go together. Just remember that interest rates aren’t the end game when it comes to your emergency fund. You want three to six months of expenses just sitting there, waiting for life to happen. Trust me, it will! - Dave

*Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at www.daveramsey.com.

 

Disclaimer: The content supplied by columnists and letters to the Editor on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such content, statement, or opinions therein. SurfKY News does not necessarily adhere to or endorse content provided by outside non-staff sources.

© Copyright 2015 SurfKY News Group, Inc. All rights reserved. This material may not be published, broadcast, or rewritten without permission. SurfKY News encourages you to share this story on social media.

In Other News...

Daviess County Traffic Advisory

DAVIESS COUNTY, Ky. (2/28/15) — A contractor for the Kentucky Transportation Cabinet plans to ramp up work zone… Read More

Pyrotechnic Event for City's Bird Control Program on Monday, March 2

OWENSBORO, Ky. (2/28/15) — In the interest of human health and safety, a pyrotechnic event, which is part of the City… Read More

Most Read This Week

February 21, 2015 7166

Traffic Advisory for Western Kentucky

in Top News For All Sites by KTC
February 25, 2015 6314

Multi-Agency Investigation Nets Large-Scale Meth…

in Top News For All Sites by Trooper Stu Recke
February 24, 2015 6204

Two Charged in Central City Meth Bust

in Local (Muhlenberg) Top News by Trooper Stu Recke
February 22, 2015 5984

Easter Cuties Pageant in Memory of Shanice Bean

in Top News For All Sites Touching Hopkins by Tammy Holloway, SurfKY News
February 25, 2015 5909

New Asian Restaurant Coming to Madisonville

in Local (Hopkins) Top News by Gary Gates, SurfKY News
February 21, 2015 5727

Local Administrators Warn Employees to Watch for…

in Top News For All Sites by Tammy Holloway, SurfKY News

Most Read This Month

February 12, 2015

UPDATE: Name of Pennyrile Fatality Officially…

in Top News For All Sites Touching Hopkins by Doreen Dennis, SurfKY News
February 09, 2015

Police Pursue Man after Fight at Taco Bell

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Detention Center

Stories Trending Today

February 28, 2015 2130

City's Parking Ordinances to be Strictly Enforced…

in Local (Hopkins) Top News by Doreen Dennis, SurfKY News
February 27, 2015 1545

Madisonville Police Arrest Reports - Feb. 27, 2015

in Hopkins News by Madisonville Police Department
February 27, 2015 1372

Hopkins County Sheriff's Reports Released

in Hopkins News by Hopkins County Sheriff's Office
February 27, 2015 1274

Tim Thomas to Speak at Rescheduled Black History…

in Top News For All Sites Touching Hopkins by Tammy Holloway, SurfKY News
February 27, 2015 1210

AIRPLAY: Travis Dukes Makes Stop for Jam Session

in Top News For All Sites by Paul McRee, SurfKY News
February 27, 2015 1075

Mustangs Fall to McLean County in Three Overtime…

in Local (Muhlenberg) Top News by Steve LeMaster
February 27, 2015 1047

How to Reduce Greenhouse Gas Emissions at Home

in General News For All Sites by SurfKY News
February 27, 2015 1044

Tips for Travelers Considering a Cruise

in General News For All Sites by SurfKY News
February 27, 2015 1031

Whitfield Presses Health Secretary on Obamacare…

in General News For All Sites by Marty Irby
February 27, 2015 977

The Potentially Harmful Effects of Mold in Your…

in General News For All Sites by SurfKY News