Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Fayette | Henderson | Lakes | McCracken | Warren | Webster

Dave Says – Dec. 8, 2013

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 2014 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.

Most Read This Week (Site-Wide)

August 17, 2014 3225

Greenville Police Conducting Traffic…

in Top Stories by Wes Miller
August 16, 2014 3199

Pogue's Automotive Annual Picnic Brings…

in Top Stories by Charles W. Riley II, SurfKY News
August 18, 2014 2817

Man Injured in Early Morning WKP Accident

in Top Stories by Rita Dukes Smith, SurfKY News Director
August 18, 2014 2488

Owensboro Board of Commissioners…

in News by Beth Cecil
August 18, 2014 2419

Madisonville Man Charged for Shoplifting,…

in Top Stories by Madisonville Police Department

Most Read Stories from Hopkins County

August 18, 2014 2419

Madisonville Man Charged for Shoplifting,…

in Top Stories by Madisonville Police Department
August 16, 2014 1394

Non-Partisan Offices Deadline Passes -…

in Top Stories by Keenan Ratliff
August 16, 2014 1213

Madisonville Police Conducting Sobriety…

in Top Stories by Lt. Charles Young II
August 18, 2014 1185

Madisonville Firefighters Recognized for…

in Top Stories by Rita Dukes Smith, SurfKY News Director
August 19, 2014 816

Firefighters Battle Blaze Near…

in Top Stories by Rita Dukes Smith, SurfKY News Director

Most Read Stories from Owensboro

August 18, 2014 2488

Owensboro Board of Commissioners…

in News by Beth Cecil
August 18, 2014 2373

Unlawful Solicitation

in News by Sgt. J.D. Winkler
August 18, 2014 2314

RiverArtes Opening at OMFA

in News by Owensboro Museum of Fine Art
August 19, 2014 1630

Free Arthritis Exercise Program will be…

in News by Woody Maglinger
August 19, 2014 1284

Municipal Art Collection on Exhibit at…

in News by Mary Bryan Hood

Most Read Stories from Muhlenberg County

August 17, 2014 3225

Greenville Police Conducting Traffic…

in Top Stories by Wes Miller
August 16, 2014 3199

Pogue's Automotive Annual Picnic Brings…

in Top Stories by Charles W. Riley II, SurfKY News
August 18, 2014 2817

Man Injured in Early Morning WKP Accident

in Top Stories by Rita Dukes Smith, SurfKY News Director
August 18, 2014 1949

Luke's Flea Market Vendors' Home Away…

in Top Stories by Charles W. Riley II, SurfKY News
August 18, 2014 1910

'How Dry I Was'

in Top Stories by Rita Dukes Smith, SurfKY News Director

SurfKY News Group, Inc. Central Office & Printing Division
1125 Nebo Rd.  •  Madisonville, KY 42431  •  270.452.2249 (fax)
Main Number: 270.452.2727 (phone)  •  Printing Division Direct Line: 270.821.8600 (phone)

SurfKY Owensboro News Bureau
920 Frederica St. / Suite 210  •  Owensboro, KY 42301  •  270.683-8060 (phone)


Contact a member of our staff: www.surfky.com/contact
Copyright © 2014 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social 03social 04social 22social 21social 06