New Castle News

All About You ...

December 6, 2013

Dave Ramsey: Where to keep the emergency fund?

NEW CASTLE —  

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

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

 

1
Text Only | Photo Reprints
All About You ...
  • Ramsey.jpg Dave Says: Problems with no credit score?

    “Dave Says” is a weekly column featuring financial advice from nationally syndicated radio host Dave Ramsey. His column is filled with timely, relevant questions and answers taken from actual letters and calls on Ramsey’s radio progam, “The Dave Ramsey Show.”
     

    April 18, 2014 1 Photo

  • Brothers.jpg Lori Brothers: Play with names — not with your food

    Do you remember being told, “don’t play with your food” when you were a child?  Or maybe you’ve said this to your own children or grandchildren. I’ve heard stories about kids slipping food under the table to the dog or stuffing Brussels sprouts into their pockets to get out of the pain of eating them.

    April 17, 2014 1 Photo

  • stright.jpg Sarah Stright-Hartley: A T-shirt dress can be a three for all

    I love finding pieces that can be worn for just about every portion of my life.  From daytime, to work, and then on a date with my husband, I like pieces that can go the distance.

    April 16, 2014 2 Photos

  • ivy_bday.jpg Kali Davies-Anderson: Happy birthday, Miss Ivy!

    This week I would like to take time out of my usual ramblings to wish my second born daughter, Ivy, a very, very happy first birthday!

    April 15, 2014 2 Photos

  • Olszak.jpg Heartbleed raises the stakes on Internet security

    My column last week dealt with Internet and related scams, along with steps people can take to protect themselves. Today’s column could be termed Part 2 of that topic, albeit from a different angle.

    April 14, 2014 1 Photo

  • Hudson.jpg Lugene Hudson: Celebrate Easter like Helen Martin

    What’s cookin? That’s one of our favorite questions at Culinary Conversation. We love when readers share some of their favorites. This week, Helen Martin of New Castle stepped up to the plate to answer that question regarding Easter dinners.

    April 12, 2014 1 Photo

  • Ramsey.jpg Dave Ramsey: You can’t borrow way out of debt

    “Dave Says” is a weekly column featuring financial advice from nationally syndicated radio host Dave Ramsey. His column is filled with timely, relevant questions and answers taken from actual letters and calls on Ramsey’s radio progam, “The Dave Ramsey Show.”
     

    April 11, 2014 1 Photo

  • Brothers.jpg Lori Brothers: Wellness a growing trend among those over 50

    The power of choice that the explosion of Internet information has generated is moving us as a culture in a direction to examine who we are and what we really value.

    April 10, 2014 1 Photo

  • stright.jpg Sarah Stright-Hartley: Some perfect fits for heading back to work

    I'm heading back to work soon and I've really been thinking about my work wardrobe — especially because I'm hoping most of it still fits my post-baby body.

    April 9, 2014 2 Photos

  • Kali.jpg Kali Davies-Anderson: It’s one of those days — and sometimes that’s OK

    Today, I am distracted. I had a long weekend. I am kind of in a bad mood. My daughter is playing with a toy with multiple musical buttons and keeps interrupting the playing song to start it over again.

    April 8, 2014 1 Photo

House Ads
Poll

Are you concerned enough about the Heartbleed bug on the Internet to change all of your social media and website passwords?

Yes. It’s always a good idea to change passwords regularly anyway. I just have so many, I’m not sure where to start.
No. From what I’ve read, companies are still trying to figure out how to fix the flaw. The bad guys will just have access to my NEW passwords, too.
Not sure, but I blame Al Gore. He invented the Internet, right? How’s he going to get us out of this mess?
     View Results