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
NEW CASTLE —
Culinary Conversation: Think globally, cook locally
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It’s no surprise that Tom Wolf is far ahead of other Democratic candidates for governor, according to a recent poll. After all, Wolf has been flooding the airwaves with ads, effective ones at that, as evidenced by this Franklin & Marshall College Poll.
Culinary Conversation: From main dish to dessert, some recipes for your holiday table
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Mitchel Olszak: Doubting the basic intelligence of ravens nevermore
Every now and then, I find myself watching the ravens around my house. That’s because their behavior is fascinating, and at times more than a little disturbing.
Culinary Conversation: Go on; give someone the raspberries
It was my first bowl of red raspberries for the season. And I was jubilant. Plump, juicy and delicious to the last bite, those little nuggets of sweetness satisfied. After this stretched-out, dismal winter, I was ready for a little taste of spring.
Culinary Conversation: Greens, cakes among reader’s recipes
Weeks always start out better when something pleasant arrives in the mail. No, I didn’t win the Publisher’s Clearinghouse Sweepstakes.
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