Dave Says: Short term planning

Dear Dave,

My husband and I are completely debt-free, and we’re saving up for our first house. We currently have about $90,000 in savings, and we’d like to buy a home with cash in the next few years. Where should we put our money, so it will work for us while we save more?

Aimee

Dear Aimee,

It’s a great feeling when you don’t have any debt hanging over your head, isn’t it? With the path you’re on now, just imagine how incredible it will be in a few years to have a new home and still be debt-free!

If I were in your shoes, and maybe looking at a three- to five-year window, I’d just park the cash in a good market account. You won’t make a lot off it, but your money will be safe. Besides, all you’re looking for is a wise place to stash it for a little while.

When it comes to long-term investing I’m a big fan of growth stock mutual funds. The problem with that in your situation would be the volatility of the market. By the time you’ve saved up more money, and spent time deciding on a house, the market may be down.

It sounds like you two are doing a fantastic job with your finances. Congratulations!

—Dave

 

* Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money MakeoverThe Dave Ramsey Show is heard by more than 14 million listeners each week on 600 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.

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Should I still contribute up to the match to my 401(k) at work, like you recommend, if I’m in the process of trying to get out of debt?