“One of the tests of leadership is the ability to recognize a problem before it becomes an emergency.” – A.H. Glasgow
Money is a hot topic. For some because they see it as the root of all evil, for others because it’s all they think about. I like to take a balanced approach, as much as possible. Money won’t make life worth living in itself, but even the Scripture dedicates a lot of space to talking about our attitudes and actions involving money. It has more than 2,000 references to money and this tells me it’s something worth paying attention to.
I see money as a means to an end. It pays bills, buys necessities, blesses us, and allows us to bless others. We receive it as fruit of our labor, and use it to invest in the things we care about. It is also necessary to have money to get by in this world.
Sure God will step in and bail us out on occasion, and praise God for it! However, if we’re constantly needing a miracle from God to pay every bill (unless we’re in a time of layoff, unemployment or crisis) then there’s something fundamentally wrong in our approach to money.
While money won’t handle all emergencies, like those of health or relationships, it is necessary to pay for medical bills, home maintenance, or in case of a job loss.
Most of the tips below are ways to generally handle money well so you’re prepared for emergencies. They’re not set in stone, but they’ve worked for us and I hope you find some that work for you too!
1. Create a separate account
To save an emergency fund and a basic short-term savings account, open another account. If you get a savings account linked to your checking account you can easily transfer funds between them for emergencies. Leaving money in your checking account will mean you are far more likely to spend it, and won’t have what you need if the time comes.
2. Save first
Immediately after being paid, we tithe and save. Before any spending has happened and before bills. Since I’ve budgeted I know exactly how much we can save that month and I’ll transfer the saved money before it has a chance to get spent on anything else. This may feel risky, but if it’s in a linked account it’s no trouble to transfer back if a need arises.
Another great way to ensure you are prioritizing and budgeting well is to automate your finances. Most pay checks come into the account automatically now, so why not set up your bills to do the same? Tithing, electricity, mortgage, retirement, etc. can be withdrawn automatically and this will prevent you from having late payments or over-spending leaving too little to pay your bills.
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God has given us our situation, talents, and skills that earn money, and we tithe without even thinking about it. In Derek Prince’s book God’s Plan for Your Money*, he told an interesting story of a pastor during the Great Depression. This pastor’s church had enough resources to help those in need, and he asked every person who came through the door the same question. “Did you tithe regularly when you had an income?” Not one person who came into his office asking for money had tithed regularly. This isn’t to say that tithing is some magical bulletproof protection, but there is a definite spiritual principle at work.
5. Don’t deprive
While I will say we are a frugal household, it isn’t out of some grand frugal strategy. We try to purchase minimally, but we don’t have a habit of depriving ourselves. Within reason we will shop, go out to eat, or go on vacations. Trying to be “too” frugal or “too” stingy will only mean your choices and habits are simply unsustainable. If you budget with some give room you’ll feel more able to continue on your financial plan to eventual freedom.
6. Don’t spend windfalls
I know some families will do exactly the opposite of this, but we rarely spend windfalls. When an unexpected amount of money comes in, like a tax refund or a bonus, we pay off outstanding debt or – if there is none – save it. If there was a necessity we’d use it obviously, but we don’t look around for a big purchase just because we have a large chunk of money coming in. Sustainable and reasonable financial habits generally prevent us from desiring rash purchases.
7. Systematically pay off debt
If you have car debt, student loans, or credit card debt, now is the time to pay them off. Proverbs says the borrower is a slave to the lender and, boy oh boy, this is true. If you’re a slave to Visa, Victoria’s Secret, and Bank of America then you’re not in control of your own life. If someone called a debt in full you couldn’t pay it. Think about your debts as actual lack of control over your life – because it is – and this’ll help you start knocking off those payments.
8. Be a smart saver and spender
Being a smart saver and spender means you know when to do what. Sometimes you need to spend some money to invest in yourself. Sometimes you need to forgo a purchase to save. Depending on your life stage, life season, and state of health the amount you need to save may vary. It’s not about putting money as an idol, but about establishing freedom for your family.
God calls us into different situations in different seasons. Sometimes we may find ourselves with far more than we need and other times lacking. Always with faith, always knowing from where our money comes, we should be using our common sense and godly wisdom to plan for the future. I know many see worrying about money as a “lack of faith” but I think that’s absolute malarkey. And it’s usually said by people who are stone cold broke and need others charity to pay their bills. Don’t send me hate mail.
The biggest reason for getting your finances in order is that you’re able to bless others. The more you have, the more you can give. Acts 20:35 says, “In everything I did I showed you that by this kind of hard work we must help the weak, remembering the words the Lord Jesus Himself said: ‘It is more blessed to give than to receive.'”