Start Your Emergency Fund
I am proud of you — you are well on your way to stress-free finances!
Every pay period is an opportunity to take a step of faith.
When you choose to manage God’s resources God’s way, you are better set up for blessing and success:
Live on the remaining 80%
If it’s the first of the month, today is the perfect day to put your new plan into action by bringing God your tithe.
Your next step is to Save 10%.
Most Americans do not save money; they foolishly spend everything instead of managing resources wisely:
There is great wisdom is setting aside resources for future needs and emergencies. This is called creating a budget.
Wouldn’t it feel great to have a buffer between you and the curveballs life throws at you—a cushion that helps you sleep soundly because it turns a major life crisis into just a slight inconvenience?
Even if your AC goes on the fritz in mid-July, you’re cool as can be. Why? Because you had your safety net in place!
Only 3% of Americans have a written budget. You can leap ahead of 97% of your friends and neighbors by creating a written budget!
One of the first things we teach people in our Financial Peace Class at Life Church is after bringing God your tithe, build an Emergency Fund.
An emergency fund is simply money you’ve set aside for life’s unexpected events.
We’re talking about true emergencies here, like a car wreck, a hospital visit or a leaky roof. Suddenly seeing that flat-screen television go on clearance or walking past a BOGO shoe sale doesn’t qualify as an emergency need.
If you have debt, I recommend saving a starter emergency fund of $1,000 first. Then, once you’re out of debt, it’s time to beef up those savings and build a fully funded emergency fund of three to six months of expenses:
How to Build an Emergency Fund
1. Make a budget and live by it.
List all your monthly income and any expenses.
When you’re making your budget, you’ll be able to see how much money you have available to put toward your savings goal.
This will help you as you get ready to jump into the next step.
2. Set a monthly savings goal.
This is how much you want to set aside each month to continue building up your emergency fund.
I know, taking money from your paycheck and putting it away to save for the future can be really hard. But you’ll be surprised at how quickly your savings can grow if you’re consistent about adding to it!
Don’t know how much is the right amount? Go back to step one and work that budget.
3. Adjust how much you save.
As time goes by, you might be able to save even more! If you or your spouse get a promotion at work, that means you can add more cash to your savings! Be sure to look over your budget for new ways to tighten the purse strings and up the amount you’re saving.
If you feel discouraged or overwhelmed, here’s the good news: You don’t have to do this alone!
I want to encourage you to register for our next Financial Peace Class at Life Church — In our next session together, we are going to drill down deep and make some major progress together!