Today in the money section, I’d like to talk about some general money saving advise. Dave Ramsey, as well as MANY other financial counselors, recommends to keep at least a $1,000 emergency fund in the bank at all times. The truth is that, in all honesty, most “emergencies” require more than $1,000 so it seems viable to me that this would be an absolute minimum recommended emergency fund (his next step is recommending a saved 3-6 month cushion to live on, after debt is paid). Here are a few thoughts and ideas I’ve picked up during our first 2 weeks of financial peace:
Think about the following: MOST of our “emergencies” are actually not necessarily “emergencies” at all. Let’s think about this logically. I own a car. It has 113k on it… it seems logical to think that, feasibly, I could require a car repair at some time in the future. If the bottom of the car falls out tomorrow or the transmission needs to be replaced that $1,000+ expense really isn’t a surprise – I own a car therefore I will have car repairs. Needing new clothes, washer/drier, or cars, paying rent or utilities, and purchasing gifts, gas, and household items should never take us by surprise. These often “emergency” expenses only take us by surprise if we let them. In our budget, Ryan and I are making allowances to cover most anything “normal” that would be thrown at us. Outside of this (large and unexpected medical bill, job loss, or something of this magnificent proportion) would be the time we would reach for that emergency fund.
Saving a $1,000 emergency fund can be a daunting task, but take heart. Here are a few ideas that were passed around at our Financial Peace small group meeting:
– Have a yard sale – chances are, you have stuff (clothes, toys, shoes, household items, etc) that people would love to chunk down some money for. Commit to cleaning out in the next couple of weeks and just have a sale in your own backyard! Make some money and use that to start saving!
– Take on some extra work – part of why I do my Cooking with Ellen business is to pull in a little extra income for our family. I sell my cookbook as well as the Rada knives and make gift sets to sell. This little extra income would help to purchase stuff for our family should we need it. When we need a few extra bucks (generally during the time tuition comes due every few months!) I’m quick to accept speaking opportunities at night or some extra work at the hospital in town or at a local crafts fair.
– Don’t eat out – every time you have a hankering for McDonalds, just stick that $5 (sometimes more!) in a jar in your car. You’ll be shocked how quickly that jar gets really full. If you do go out, order water and don’t get a combo and DEFINITELY don’t biggie size it (this goes nutritionally and financially!)! Coffee, fast food, gas stations, and restaurants are some of the quickest ways to drop money needlessly.
– Look at your bank statement – yes, that means GET IT OUT OF THE ENVELOPE AND READ IT!!! – what are you buying? where is your money going each month? Just sitting down and reconciling everything we spend into Quicken inspires me to spend less! It was humbling and mortifying when we looked at how much “dining out” and “entertainment” we spent!
While managing money and saving is much easier said than done, may this parable of Jesus be your inspiration – it has certainly been convicting to me:
Matthew 25:14-30 – “For it is just like a man about to go on a journey, who called his own slaves and entrusted his possessions to them. To one he gave five talents, to another, two, and to another, one, each according to his own ability; and he went on his journey. Immediately the one who had received the five talents went and traded with them, and gained five more talents. In the same manner the one who had received the two talents gained two more. But he who received the one talent went away, and dug a hole in the ground and hid his master’s money. Now after a long time the master of those slaves came and settled accounts with them. The one who had received the five talents came up and brought five more talents, saying, ‘Master, you entrusted five talents to me. See, I have gained five more talents.’ His master said to him, ‘Well done, good and faithful slave. You were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.’ Also the one who had received the two talents came up and said, ‘Master, you entrusted two talents to me. See, I have gained two more talents.’ His master said to him, ‘Well done, good and faithful slave. You were faithful with a few things, I will put you in charge of many things; enter into the joy of your master.’ And the one also who had received the one talent came up and said, ‘Master, I knew you to be a hard man, reaping where you did not sow and gathering where you scattered no seed. ‘And I was afraid, and went away and hid your talent in the ground. See, you have what is yours.’ But his master answered and said to him, ‘You wicked, lazy slave, you knew that I reap where I did not sow and gather where I scattered no seed. ‘Then you ought to have put my money in the bank, and on my arrival I would have received my money back with interest. ‘Therefore take away the talent from him, and give it to the one who has the ten talents.’ “For to everyone who has, more shall be given, and he will have an abundance; but from the one who does not have, even what he does have shall be taken away. “Throw out the worthless slave into the outer darkness; in that place there will be weeping and gnashing of teeth.”
Pray and ask the Lord for guidance to remain faithful with what you have been given!