More than a quarter of Americans have no emergency savings, according to an annual survey released Monday by Bankrate.com. Of those who do have savings, 67% have less than six months’ worth of expenses, what Bankrate calls the recommended amount, and those with at least three months’ of expenses declined from 45% in 2013 to 40%. (Hadley Malcolm, USA TODAY)
An emergency savings is usually defined as having six months of living expenses available for when of an emergency such as the loss of a job or a major unexpected expense.
In general our society encourages even guilt us into the notion that we need to have savings. Not only an emergency fund, but also hundreds of thousands saved for retirement—whatever that is.
For some Christ followers, a tension exists. If I concern myself too much about savings and retirement, am I lacking faith that God will provide?
How can a person feel confident about their savings plan? Here are a few of my thoughts:
Change your paradigm
What is your reason for saving? If it is strictly for a sense of security and to retire someday so you can do nothing, I suggest realigning your reason.
We never will be able to “save” enough to guarantee financial security. Our security is completely in the hands of God. We lose our source of income, our health fails us, demands on our income change, etc.
Does that mean we don’t save? Of course not. I completely believe in putting away money for emergencies, big-ticket items to avoid debt, and having funds available to give when we see a need.
And retirement—well I don’t think retirement is a good thing for us. Now hear me out. I don’t think we need to keep working until the day we die just to keep making money. But, continuing to work is a good thing for us.
How many people, men especially, died within a year or two after they “retired”? I am not sure we are created to do nothing.
So, if my goal is not to retire, what am I saving my money for?
- To provide for your family and beyond. We should work hard and handle our money wisely so that our family will not be a burden on others. The whole idea of this is to create wealth not so you can buy more toys and play more, but so you can free up your lifestyle so that you are not having to work to live—Not only for your immediate family, but for your kid’s kids
- To create wealth to influence others. Instead of creating wealth so you can “retire” living each day trying to figure out what you are going to do that day, create wealth and freedom so you can influence others. When you have money and time, you can invest both into things that matter and make a difference in this world. That is influence.
By changing the way you think about savings and retirement, you can begin to feel confident in why you are saving.
Live below your means.
After changing your paradigm for saving, this will be an easier task. I blogged about five reasons to cap your lifestyle a few months ago here:
- Prepare for the future
- Reduce stress
- Adjust focus
Living below your means doesn’t just happen on its own. It takes focus, especially at first, to change your way of spending money and living life. It might mean that you don’t have the latest and greatest gadget, car, or home furnishings. It also might mean that your children don’t go to the “right” school or have the “right” kind of clothes or toys.
Bottom line—do you want to be in control of your savings/finances or will you allow it to control you?
One gives you confidence in your savings plan, the other doesn’t.
What would it take for you to change your paradigm towards saving money?