Dear Dave,

My wife and I are debt-free, and we’re ready to start building our first home. We’re a little short on cash to make the 20 per cent down payment you recommend, but we do have a fully funded emergency fund in place. Would it be okay to take a little out of our emergency fund to make up the difference?

CHRIS

Dear Chris,

Well, you didn’t give me exact numbers here. I don’t know how short a little short is, and I don’t know how big your emergency fund is. If you use a little of your emergency fund to round off the 20 per cent and then you have an emergency, where are you going to be?

I recommend always having three to six months of expenses set aside for emergencies. If you’ve got $50,000 in your emergency fund and you use $10,000 of it, you’ll be fine. But anything that leaves you with less than three or four months of expenses stashed away would worry me. That’s the way you’ve got to look at it. Just use a little common sense with the numbers.

I’d love for you to put down 20 per cent because you’d avoid private mortgage insurance, which runs about $75 a month per $100,000 borrowed. It costs you a lot of money if you don’t put down 20 per cent. You should try to do that if possible, but don’t be irresponsible with your emergency fund in the process.

Your emergency fund, when it’s there, tends to keep emergencies away. When it’s not there, you have a tendency to attract emergencies and your life starts to sound like a sad country song.

—DAVE

Dave Ramsey is CEO of Ramsey Solutions. He has authored seven bestselling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 12 million listeners each week on 575 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey