Christian Financial Advice and Biblical Stewardship

Pay Yourself Second

  • Matt Bell
  • 2012 22 May
Pay Yourself Second

Of all the things you can do with money, few are more boring than putting it into a savings account, right?

Spending it? Now, that’s fun. Investing can be enjoyable, too. But parking some money in an “interest-bearing” savings account where $1,000 may turn into $1,001 in a year’s time? Who needs it?

You do, and so do I, which is why Put Some Away is the fifth of my 11 principles for simple meaningful financial success.

Making Savings More Exciting

Imagine that every dollar you put on deposit will improve your health. Research shows that people with an adequate emergency fund experience less stress than those that don’t.

If you’re married, imagine that every dollar you put into savings is an investment in your relationship. Research shows that couples that live within their means, putting a portion of their earnings into savings, are happier than those that don’t.

No matter what your situation, let’s face it: in life, stuff happens. Cars break down, costing us more than we have in our maintenance and repair fund (you do budget some money each month for maintenance and repairs, don’t you?). Other unplanned expenses pop up.

For all those reasons and more, it’s important to pay yourself second.

“Ah, Matt, isn’t that supposed to be, ‘Pay yourself first?’” No. As we talked about earlier in this series on the 11 principles for simple, meaningful financial success, it’s important to pay your purpose first, and then pay yourself.

How Much Should You Keep in Savings?

If you have any debt other than a reasonable mortgage, build a savings account with enough money to pay one month’s worth of essential living expenses. Then, go after your debt. Once you’re out of debt, build an emergency fund valued at six months’ worth of essential living expenses.

How much is that for you? Take a look at the categories on our Cash Flow Plan worksheet and highlight the ones that are truly essential.

If you lost your job tomorrow, going on a vacation probably wouldn’t be a high priority. But you’d still need to pay your mortgage or rent and utilities, buy groceries and other essentials.

Where Should You Keep Your Savings?

None of the choices for savings accounts are very attractive these days. Interest rates are extremely low.

However, online banks usually pay better rates than brick and mortar banks. As do credit unions.

But earning interest isn’t a primary goal of an emergency fund. Mostly, you just want your money to be safe and accessible if you need it.

One final word of recommendation about savings. Keep your emergency fund in a separate account. When people keep money intended for emergencies in their checking account, it usually leaks. It’s just too tempting to use it for other things.

Where do you keep your emergency fund money? Let me know in the comments section.

Other posts in this series on the 11 principles that lead to simple, meaningful success:

Matt Bell is the author of three personal finance books published by NavPress, leads workshops at churches and universities around the country, and serves as Associate Editor at Sound Mind Investing, America’s best-selling investment newsletter written from a biblical perspective. To learn more and for a free subscription to the Sound Mind Investing blog, go to

Publication date: May 22, 2012