One Savings Loophole

The only exception to the "save before investing" rule is when you're eligible to participate in a 401(k) plan that offers an employer match. If your employer will match your contributions—many will do so at 50 cents per dollar you contribute or even dollar for dollar, usually up to 3%-6% of your salary—that's such a great deal, I'd hesitate to see you pass it up. So, if you can still build savings while also contributing to your workplace plan to get the match, I'd suggest doing that.

Building savings will never score very high on the thrill-o-meter of life. However, having a well-stocked emergency fund will contribute mightily to your peace of mind as you pursue your investment goals. So, build savings first, then invest.

Matt Bell is Associate Editor at Sound Mind Investing. Since its founding by Austin Pryor 23 years ago, SMI has been providing clear, trustworthy, effective investment guidance to the Christian community. Some 10,000 subscribers look to its flagship publication, the Sound Mind Investing monthly newsletter, for biblical guidance on a range of financial issues and specific investment advice. Matt is also the author of four personal finance books published by NavPress, including Money, Purpose, Joy: The Proven Path to Uncommon Financial Success.

Publication date: September 20, 2013