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.

Posted on 2/2/14
3/13 - 16
3/13 - 16

Most Read This Week

March 27, 2015 6073

Three Arrested during Execution of Search…

by Madisonville Police Department/Hopkins County Detention Center
March 25, 2015 5545

Fazoli's, Roses Coming to Madisonville

by Amber Averitt, SurfKY News
March 24, 2015 5248

One Dies, Another Injured in Mortons Gap Traffic…

by Deputy Heath Owens
March 25, 2015 5199

Grand Jury Finds No Criminal Wrongdoing in Bean…

by Doreen Dennis, SurfKY News
March 30, 2015 4830

Man Charged with Child Abuse After Allegedly…

by Madisonville Police Department
March 24, 2015 4339

UPDATE: One Injured in Hopkinsville Road Accident

by Doreen Dennis, SurfKY News

Most Read This Month

March 09, 2015 14198

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

by KSP DESI
March 02, 2015 11698

Madisonville Teen Faces Numerous Drug Charges

by Madisonville Police Department/Hopkins County Detention Center

Stories Trending Today

March 30, 2015 4830

Man Charged with Child Abuse After Allegedly…

by Madisonville Police Department
March 30, 2015 2730

Man Charged for Selling Drugs from Red Cardinal…

by Madisonville Police Department
March 30, 2015 2701

Juvenile Arrested for Cruelty to Animals

by Hopkins County Sheriff's Office
March 30, 2015 2670

Two Charged in Bremen Meth Bust

by Sheriff Curtis McGehee
March 30, 2015 2397

Report of Suspicious Man Ends with PI, Meth…

by Madisonville Police Department
March 31, 2015 1870

Man Charged for Driving While under Influence of…

by Madisonville Police Department
March 30, 2015 1535

Madisonville Police Arrest Reports - March 30,…

by Madisonville Police Department
March 29, 2015 1531

Huge Turnout Joins to Support Shanice Bean Family

by Tammy Holloway, SurfKY News
March 31, 2015 1230

Happenings and Meetings - Hopkins County

by Amber Averitt, SurfKY News
March 30, 2015 1205

Hopkins County Sheriff's Arrest Reports

by Hopkins County Sheriff's Office