The next expense you put will be your Emergency Savings, which is another 10 percent. Don’t worry right now about not having any money for this fund. This is why we are making a budget. We want to tell our money where we want it to go.
You might not be able to put 10% of your net pay right off. Therefore, your goal should be to save $1,000 as quickly as you can. Then, you can shoot for the 10%.
Eventually, you want to have eight to twelve months of living expenses in your emergency savings. For now, the main thing is to get started in building-up or in creating an emergency savings. Without this emergency savings, every unforeseen expense that comes up will be an emergency and you will end-up paying it with a credit card.
Remember that we do not want to use plastic anymore. Chances are that you do not have an emergency savings. If anything were to break, like one of your kitchen appliances or if your car broke down, would you be able to pay for the repair in cash? If you don’t have an emergency savings, then you most likely will put the repair on your credit card, borrow the money, or leave it broken. You don’t want that anymore. Now is the time to change your way of thinking and to take control of your money. We do this by making our money blueprint/spending plan/budget.
Luke 14:28 “Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it?