Christian Financial Advice and Biblical Stewardship

Finance Q&A: Savings - Where Should You Start?

  • 2010 8 Apr
Finance Q&A: Savings - Where Should You Start?

Dear Deborah:

Q: Savings: Where do I start? - Stevie

A: Begin by asking yourself why you want to save.

We all have good intentions. Yet if we don't have a written and stated purpose, oftentimes we never get started.

Examine and list your top five life priorities. What is most important to you in life? What are your short-range goals and long-range goals in each of these areas? Think about the consequences of not saving for your priorities. What is likely to happen if you don't save?


Wall Street Journal reports that a recent study by Prudential Financial Inc. found that seven out of 10 Americans are more concerned by daily financial consumption than saving for retirement. Additionally, "households with income higher than $75,000 are just as likely as those earning less to say that saving for retirement isn't a primary objective."

Once you've focused on why you want to save, decide on how much you can save.

Examine your monthly income and outgo. Do you keep track of your expenses? Poor record keeping is the number one reason for small business failure, according to the Small Business Administration. Similarly, many families are in dire financial predicaments because they don't have budgets. It's been reported that 52% of Americans lose $3,000 a year not knowing where their money went. Imagine how they'd be in a far better financial situation today if they had placed the $3,000 in a rainy day fund.

Some people don't save because they think they don't have any extra money. Get on track for saving by planning a written monthly budget. Do your expenses align with your priorities? Look at ways you can increase income and cut expenses in order to balance the budget and to save. You can find money to save by cutting expenses that don't fit in with your priorities and by avoiding impulse buys. A realistic budget allows you the freedom to control your spending, rather than having your spending control you. Managing money well is a lifestyle that offers countless rewards.

Other people don't save because they have an "all-or-nothing" mentality. They think if they can't save a large dollar amount at a time, then they might as well forget about even starting. This is a common error in their thinking. They can start by saving smaller amounts. Big goals can be broken down into smaller ones. Approach savings goals in manageable steps.

Tips on saving:

1.      Save early. Time is on your side. Be patient.

2.        If you don't set aside money now, you won't have it later.

3.        Make saving automatic, directing funds regularly to various accounts for specific purposes.


4.        When investing in stocks, have a dividend reinvestment plan (DRIP). Reinvest the dividends and watch the stock value compound.



Copyright 2010 Deborah Nayrocker. All rights reserved. Permission to reprint required.

Deborah Nayrocker is the author of The Art of Debt-Free Living and the popular Bible study Living a Balanced Financial Life. She is an award-winning writer and columnist.