There are only four things we can do with money:
- Save it
- Spend it
- Give it away
- Hoard it
In America today, an alarming trend has developed. We have flip-flopped savings and debt. We have increased debt and decreased savings. Whereas before, we had increased savings and low debt.
In order to turn that around, we need to look back to Genesis 41:17-32. It is the interpretation of Pharaoh’s dream given to Joseph by God. God told Joseph to save up in the seven years of abundance, so that they could make it through the seven years of famine. We too need to save a portion of what we earn to provide for the times of need.
God also shows us this by pointing us to the ants.
Proverbs 6:6-8 – Go to the ant, thou sluggard; consider her ways, and be wise. Without having any chief, officer, or ruler, she prepares her bread in summer and gathers her food in harvest.
The ants save without having to be told by any authority to save. They provide for themselves during the summer, so that they can have food in the winter.
Today, we are very different from Joseph and these ants. We have become so accustomed to debt that we don’t buy a car without taking out a loan. We don’t think about house without a mortgage. We don’t think about getting our children through college without student loans. We no longer think about saving for cars, homes, education. Credit has made it too easy to be a slave.
Most Americans don’t save. In fact, the US has a negative savings rate. The primary reason for decreased savings is we are overspending. We are paying for today’s wants and desires with tomorrow’s money. We’d rather buy the latest iPad, flat screen TV, or car than save. Most people are like our government. They have deficit spending. However, unlike the government, they cannot print new money or issue bonds. The only thing to do is shift our priorities and save.
Our mindsets have become so ingrained in thinking that debt is normal. We think nothing of using our credit cards or home equity loans or payday loans to get us through the end of the month. We don’t even think about saving for what we want.
Saving money is being content with what you have. We need to be like the Apostle Paul and learn to be content in our situation. He learned the secret of being content in any and every situation, whether he was in want or in plenty.
Philippians 4:11-13, it says – “I am not saying this because I am in need, for I have learned to be content whatever the circumstances. I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want. I can do everything through him who gives me strength.”
You need to realize that it is more important for you to have savings than stuff. It’s more important to be able to retire comfortably, to send your children to college, and to have financial stability than to have stuff.
Who should save? If you earn money, you should save. The average person in America is three weeks away from bankruptcy. Most are living paycheck to paycheck. In fact, 82% of middle income Americans say there is not much money left over to save after they have paid their bills. This is an alarming statistic. It means that eight out of ten middle income Americans do not save.
Why is it important to save? You should save emergencies. You need to start building an emergency fund because emergencies are inevitable!
What happens when you need to replace your tires; do repairs on your car; repair or replace one of your major appliances; or pay a doctor’s bill? If you don’t have an emergency fund, you are going to reach for the credit card and say, “Charge it.” This leads you into debt or into deeper debt.
When you don’t have an emergency fund, you are setting yourself up for being in debt.
Remember the start of this class? Our quarterback got sacked. I want you to think of your emergency fund as your offensive line and you are the quarterback. The defense represent emergencies. What happens when you don’t have an emergency fund in place (your O-line)? You get sacked!
Everything becomes an emergency when you don’t have an emergency fund in place. What if your O-line is made up of scrawny linemen? You get sacked. If your emergency fund is low, you are going to get sacked by emergencies.
We have some goals for our emergency fund. Our first goal is to save $1,000 into the fund as quickly as we can, so we can began to be prepared for emergencies. Getting a thousand dollars saved is easy because it is not a large amount. For some of you, it is a large amount. However, you need to start. Most of you should be able to save it in a month. Don’t feel bad if it takes you a little longer. The key is to get done as quickly as you can because an emergency fund provides peace of mind.
One thing you need to remember is that saving requires an attitude change. You need to make saving a priority. When you make saving important, you are able to save.
If you don’t believe me, think about this. Let’s say you find out that one of your family members, your child, wife, husband, mother, father, brother, or sister is ill and you need to come up with $1,000 to save their life. You aren’t going to receive a raise or bonus at work and someone isn’t going to give you that $1,000. You need to save it. Would you be able to do it? Of course you would. Why? Because now you have changed your attitude. You made saving a priority. This is the way you need to think about saving. It needs to be important to you.
You need to get intense about saving the first $1,000. Maybe you cannot squeeze another penny out of your paycheck. However, look around your home and see what stuff you have lying around collecting dust that you can sell. If you haven’t used in more than a year, sell it.
If you sell everything and you’re still short, then maybe you can get a part-time job or get overtime. Be creative, heck if you have teens that are of working age, have them get a job so that they can contribute towards the household expenses. If they get a job and are able to pay for their own clothes, that’s one less thing you have to spend money on that you can use towards your $1,000 emergency fund.
Take a close look at your expenses and determine if you truly need them. You don’t need cable or satellite TV. You don’t need a newspaper subscription. You don’t need a gym membership. You don’t need a cellphone. Remember to cut out anything that is not absolutely necessary to run your household. You want to be able to cover your housing, utilities, clothing (if they desperately need replacing), food, and transportation for job hunting.