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)

July 18, 2014 2912

Madisonville Man Arrested for Meth in…

in Top Stories by Sheriff Curtis McGehee
July 18, 2014 2206

Hopkins County Health Department Food…

in News by Lisa Miller
July 21, 2014 1944

Five Sent to Hospital After Two-Vehicle…

in Top Stories by Rita Dukes Smith, SurfKY News Director
July 18, 2014 1898

K9 Unit Helps Find Meth in Muhlenberg…

in Top Stories by Sheriff Curtis McGehee
July 22, 2014 1875

Madisonville Woman Charged With…

in Top Stories by Madisonville Police Department

Most Read Stories from Hopkins County

July 18, 2014 2912

Madisonville Man Arrested for Meth in…

in Top Stories by Sheriff Curtis McGehee
July 22, 2014 1875

Madisonville Woman Charged With…

in Top Stories by Madisonville Police Department
July 19, 2014 1006

Local Hip-Hop Artist, Marack, Talks About…

in Top Stories by Amber Averitt, SurfKY News
July 21, 2014 963

Three Injured in Three-Vehicle Collision…

in Top Stories by Rita Dukes Smith, SurfKY News Director
July 21, 2014 948

Madisonville Fire Chief Announces…

in Top Stories by Rita Dukes Smith, SurfKY News Director

Most Read Stories from Owensboro

July 18, 2014 1584

Owensboro Police Department Reports…

in News by Dennis Beard, SurfKY News
July 21, 2014 923

Portion of Southeastern Parkway Closed…

in News by Beth Cecil
July 22, 2014 431

Alliance for a Drug Free Owensboro and…

in News by Carla Shelton
July 18, 2014 410

Owensboro Begins Year-Long, Long Range…

in Top Stories by Dennis Beard, SurfKY News
July 21, 2014 398

Strahan Selected as Cravens Elementary…

in Top Stories by Julie Ellis

Most Read Stories from Muhlenberg County

July 21, 2014 1944

Five Sent to Hospital After Two-Vehicle…

in Top Stories by Rita Dukes Smith, SurfKY News Director
July 18, 2014 1898

K9 Unit Helps Find Meth in Muhlenberg…

in Top Stories by Sheriff Curtis McGehee
July 18, 2014 1775

Man Injured in Depoy Accident

in Top Stories by Trooper Stu Recke
July 18, 2014 1473

From New York to Greenville, Iron Beam…

in Top Stories by Charles W. Riley II, SurfKY News
July 19, 2014 1391

Cash Mob Descends on Muhlenberg…

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 06social 21social 22social 04social 03