Dave Ramsey says: Buying a home when you’re debt-free

Dear Dave,

My wife and I are completely debt-free, and we’re saving up for our first house.

We currently have about $140,000 in savings, and we’d like to buy a home with cash when the time is right. Where should we put our money, so it will work for us while we save more?

Andy

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Are you completely debt-free? Do this

Dear Andy,

If I were in your shoes, and maybe looking at a window of three or four years, I’d just park the cash in a good money market account. You won’t make a lot off it, but your money will be safe. I mean, all you’re looking for is a smart 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.

You two are in a great place financially right now. With the path you’re on, just imagine how incredible it will be in a few years to have a new home and be debt-free!

— Dave

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