Saving – Notes

Read the Notes

The Bible encourages us to save: “The wise man saves for the future, but the foolish man spends whatever he gets” (Proverbs 21:20, TLB). God commends the ant for saving. “Four things on earth are small, yet they are extremely wise: ants are creatures of little strength, yet they store up their food in the summer” (Proverbs 30:24-25, NIV). We need to think like ants! Even though they are small, they save. You may not be in a position to save a lot right now, but begin the habit.

Joseph saved during “seven years of great plenty” (Genesis 41:29) in order to survive during “seven years of famine” (Genesis 41:30). That’s what saving is all about: not spending today so that you’ll have something to spend in the future. Most people are poor savers because they don’t see the value in practicing self-denial. Our culture screams that we “deserve” to get what we want, and when we want it!

The most effective way to save is to make it automatic. When you receive income, the first money you spend should be a gift to the Lord, and the second should go to savings. An automatic payroll deduction is a great way to save.  Remember this: if you immediately save, you’ll save more.

The Bible doesn’t teach an amount to save. We recommend saving ten percent of your income. This may not be possible initially. But begin the habit of saving — even if it’s only a dollar a month.

Emergency Fund

Why save for emergencies? Because emergencies happen! If you have saved for the emergencies, you don’t have to pile up debt to pay for them.

What Is an Emergency?

• Job loss
• Unexpected car breakdown or accident
• Unexpected medical expenses

What Isn’t an Emergency?

• Going to prom or to a formal dance
• Buying the newest game console
• A great deal on a spring break cruise or vacation
• A “once in a lifetime” sale on clothes you love
• Your tires on your car wear out – this should be an expected expense, not an emergency

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If you are in Phase 1, we recommend building your emergency savings to $500.

If you are in Phase 2, we recommend building your emergency savings to three month’s living expenses. 

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Use the Emergency Savings Calculator

Click on and use the Emergency Savings Calculator to formulate a plan to meet your emergency savings goals.

Replenishing Your Emergency Fund

After using your emergency fund, make sure you have a plan to build it back up. Each time you take money out, know how you’re going to replace it and make that replacement a priority.

Major Purchases

A car, a deposit on an apartment, a trip with friends, even a down payment on a house — these are some great things that may be a part of your life. And they all have one thing in common: they aren’t cheap!

These types of major purchases don’t pay for themselves, and we’ve already learned that we don’t want to rely on credit to fund them. So how do we make major purchases like these become a reality? We need to plan. These steps can help:

1. Before making a major purchase, make sure you have your emergency fund in place.

2. Identify what major purchases are the top priority and what the potential cost is.

3. Determine how much you are willing (and able) to spend.

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For example, let’s say you want to buy a car in the next two years. You’ve been looking and decided you want something in the in the $10,000 range.

If you are going to reach $10,000 in two years, you’ll need to begin saving over $415 a month! Depending on your financial scenario, this may be realistic or it may be overwhelming. If it is overwhelming, you may need to manage your expectations by either looking at a less expensive car or waiting three to four years to buy a car. 

Buying a $5000 car cuts the monthly amount you will need to save in half (just over $208 a month)

Changing your goal from 2 years to 4 years also cuts the monthly amount you will need to save in half (just over $208 a month).

For example, let’s say you are wanting to buy a house and want to be a new homeowner in two to three years. You’ve looked at the housing market and are thinking about a home in the $200,000 range. Knowing that you should save for a 20 percent down payment, you realize you’ll need around $40,000.

If you are going to reach $40,000 in two years, you’ll need to begin saving over $1650 a month! Depending on your financial scenario, this may be realistic or it may be really overwhelming. If it is overwhelming, you may need to manage your expectations by either looking at a less expensive home or waiting three to four years to buy. Changing your goal from 2 years to 4 years cuts the monthly amount you will need to save in half (just over $830 a month) and may make your goal of home ownership attainable.

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Where Should I Put Money for Savings?

Keep these savings in an account that is safe and easily accessible. Below are several types of accounts to review:

Savings Account

A savings account is an interest-bearing deposit account held at a bank or other financial institution. Though these accounts usually pay a small interest rate, their safety and reliability make them a great option for short-term needs.

High-yield Savings Account

A high-yield savings account offers protection of your principal, the safety of federal insurance, and a yield that’s higher than a regular savings account. If you go this route, be sure to find an account that will maximize your earnings while letting you avoid any hidden fees such as early withdrawals.

Money Market Account (Bank)

A bank money market account is an interest-bearing account at a bank or credit union. Most money market accounts pay a higher interest rate than a regular savings account and often include check writing and debit-card privileges.