Tuesday, January 27, 2015
Davis Motor Sales banner ad
Posted on 2/2/14

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 by using one of the social media links below.

2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013
1 DOW 17,426.22
-252.48 (-1.43%)    
2 S&P 2,039.55
-17.54 (-0.85%)    
3 NASDAQ 4,714.22
-57.54 (-1.21%)    
2/6/2014 - posted
3/13 - 16
Started 11/8/2013
Started 11/8/2013

Most Read This Week

January 23, 2015 8845

Local Church's Faith Restored; 71 Souls Saved…

in Video by Gary Gates, SurfKY News
January 22, 2015 7216

Nortonville Man Accused of Selling Drugs near…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 21, 2015 6348

KYDOT Pre-Treating Roads Thursday in Antipation…

in Top News For All Sites by Keith Todd
January 22, 2015 5927

MCEA Head: Further School Mergers Might Ease…

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
January 23, 2015 5738

Parents Face Charges after Marijuana Joint Falls…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 21, 2015 4916

Man Arrested after Allegedly Nodding off on Baby…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 25, 2015 4860

Dean’s List Announced

in Top News For All Sites Touching Hopkins by Joyce Riggs
January 23, 2015 4576

Nortonville Woman Charged for Meth Possession

in Local (Hopkins) Top News by Hopkins County Sheriff's Office/Hopkins County Detention Center

Most Read This Month

January 08, 2015 20678

Woman Claiming to be 'Lady Gaga' Tours Town in…

in Top News For All Sites by Madisonville Police Department
January 15, 2015 20456

UPDATE: Fatality Victim's Name Officially Released

in Top News For All Sites by Doreen Dennis, SurfKY News

Stories Trending Today

January 26, 2015 3902

KSP Arrests Two on Child Porn Charges; MPD…

in Top News For All Sites Touching Hopkins by Trooper Stu Recke
January 26, 2015 3263

Man Goes to Jail after Allegedly Attacking Family

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 25, 2015 2891

Juvenile Hit by Vehicle at McDonald's

in Local (Muhlenberg) Top News by GPD Officer Wes Miller
January 26, 2015 2052

Madisonville Post Welcomes New Troopers

in Top News For All Sites Touching Hopkins by Trooper S. C. Recke
January 26, 2015 2037

School Board Votes 3-2 for Utility Tax

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
January 26, 2015 1861

Hopkins County Sheriff's Reports Released

in General News For All Sites by Hopkins County Sheriff's Office
January 26, 2015 1733

Madisonville Police Arrest Reports - Jan. 26, 2015

in Hopkins News by Madisonville Police Department
January 26, 2015 1656

Hopkins District Court Fines Handed Down

in Local (Hopkins) Top News by Circuit Clerk's Office
January 26, 2015 1615

Kentucky Highway Crews Prepared for Snow into the…

in Top News For All Sites by Keith Todd
January 26, 2015 1312

McClearn Remains Optimistic I-69 Signs up Between…

in Top News For All Sites Touching Hopkins by Keith Todd
January 26, 2015 1082

Raffle for Custom Motorcycle to Benefit Trooper…

in General News For All Sites by Sherry H. Bray
January 26, 2015 1031

Dawson Springs Police Reports Released

in Hopkins News by Melissa Heflin