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.

LIKE SurfKY on Facebook - Click here to LIKE us now.

© 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...

‘Chasing Rainbow’ Heart Walk Raises Funds for AHA

MADISONVILLE, KY. (03/26/15) — “Chasing the Rainbow for a Healthy Heart” Heart Walk and 5K took place Saturday, March… Read More

Hopkins County Sheriff's Reports Released

HOPKINS COUNTY, Ky. (3/26/15) — The Hopkins County Sheriff's Office released the following report Thursday, March 26.… Read More

Most Read This Week

March 18, 2015 9410

UPDATE: Hanson Man Located in Henderson, Taken to…

by Trooper Stu Recke
March 18, 2015 6799

UPDATE: Name of Pedestrian Killed on Western…

by Trooper Stu Recke
March 24, 2015 4834

One Dies, Another Injured in Mortons Gap Traffic…

by Deputy Heath Owens
March 25, 2015 4802

Fazoli's, Roses Coming to Madisonville

by Amber Averitt, SurfKY News
March 25, 2015 4708

Grand Jury Finds No Criminal Wrongdoing in Bean…

by Doreen Dennis, SurfKY News
March 24, 2015 3975

UPDATE: One Injured in Hopkinsville Road Accident

by Doreen Dennis, SurfKY News

Most Read This Month

February 25, 2015 13771

Multi-Agency Investigation Nets Large-Scale Meth…

by Trooper Stu Recke
March 09, 2015 12786

Multi-Agency Drug Bust Results in $1 Million Meth…

by KSP DESI

Stories Trending Today

March 25, 2015 4802

Fazoli's, Roses Coming to Madisonville

by Amber Averitt, SurfKY News
March 25, 2015 4708

Grand Jury Finds No Criminal Wrongdoing in Bean…

by Doreen Dennis, SurfKY News
March 25, 2015 3609

Madisonville Man's Living Room Leap Lands Him in…

by Madisonville Police Department / Hopkins County Detention Center
March 25, 2015 3127

Rep Brent Yonts' Letter to TVA concerning…

by Brent Yonts
March 25, 2015 2247

Alleged Speeding in School Zone Ends in DUI Arrest

by Madisonville Police Department / Hopkins County Detention Center
March 25, 2015 1551

Greenville Man Charged with Theft of Vehicle

by Wes Miller
March 25, 2015 1549

Crime Stoppers Fugitive of the Week – March 25,…

by Hopkinsville – Christian County Crime Stoppers
March 25, 2015 1280

Madisonville Police Arrest Reports - March 25,…

by Madisonville Police Department
March 26, 2015 1279

‘Chasing Rainbow’ Heart Walk Raises Funds for AHA

by Tammy Holloway, SurfKY News
March 25, 2015 1215

Hopkins County Sheriff's Reports Released

by Hopkins County Sheriff's Office