The savings rate in 2005 was a shocking negative percentage. Before 2005, this had happened only during the years of 1932 and 1933. But wait – that was the Great Depression, a time of enormous business failures and job losses. Aren’t we talking about 2005? You know, when we bought bigger and better SUVs. So what does a negative savings rate indicate? It means that Americans were spending all of their disposable income, borrowing and then getting money out of their savings – if they had any. Not a good sign.
Howard DaytonMost families that look for ways to save money try everything from refinancing mortgages, home equity loans, and low-interest charge cards, to no-down-payment investment property and borrowing against retirement funds. But in evaluating money-saving options, 10 suggestions seem to float to the top: (1) give to God; (2) start small; (3) put money into a retirement account; (4) monitor ATM withdrawals; (5) pay off charges and loans; (6) pay extra on the home mortgage; (7) pay off car loans; (8) open an IRA; (9) evaluate life insurance; and (10) be accountable for your money.
Give to God
When you recognize that God owns everything and all blessings come from Him, your role as manager, or steward is clear. It is not that God needs your money. But giving serves as an external, material testimony that God owns both the material and spiritual things of your life, and He is the source of all your supply. He is looking for the right attitude in your giving. Since the tithe’s purpose is to be a testimony of God’s ownership, each believer should give bountifully and cheerfully.
Although the tithe may indicate your obedience to God, He is looking for the right attitude in your giving. If there is no willingness to give back to the Lord a portion of what He has entrusted to you, then giving tithes upon tithes would be of little use. So, since the tithe’s purpose is to be a testimony of God’s ownership, each believer should give bountifully and cheerfully.
Start small
Most financial experts say we need to save at least 5 percent, and preferably 10, of our income. However, don’t give up if you’re unable to save that much. Establish a saving habit and save consistently. Even as little as $5 per pay period eventually adds up. And once saving becomes a habit, set as your savings goal a maintained savings account of at least three to six months’ income.
Put money into a retirement account
If it’s available, sign up with a workplace retirement plan in which your company contributes matching funds. Decide how much money you will take out each week and discipline yourself to make the rest last. When you discover that you have money left over, deposit it into your savings account.
If your funds are limited, open an IRA only after you have maxed out with your company’s retirement plan. If you have no company retirement plan, open an IRA.
Pay off charges and loans
With desire, discipline and time, you can pay off loans and stay out of debt. If you pay extra each month on your home mortgage, you add immediate equity to your home, reduce the interest paid over the term of the loan, and reduce the length of the loan. Interest on your car loan isn’t tax deductible, and rates are generally higher than on your home mortgage. So pay it off as soon as possible.
Be accountable for your money
Know where your money is going. Establish a budget and stick to it. If an expense is not budgeted, don’t spend the money.
You might think it’s an out-of-date concept, but the biblical principle of debt-free living is still God’s plan for His people today. The blessings of being debt-free go far beyond finances. They extend to the spiritual and marital realms as well. And the effects of financial bondage on marriage relationships are reflected in the statistics of failed marriages.
So come on, God’s people – make saving money and debt freedom top priorities in the life of your family. No matter if others continue with negative savings, now would be a great time for you to turn your savings into making a positive impact for your future.