Financial Planning 101 – Savings

Piggy Bank 4
Last week, we looked at debt, one of the key elements to financial planning. Today, we’ll discuss the other key element: savings. There are two critical steps in having an effective savings plan.  The first is actually creating a plan and the second is sticking to it.

Proverbs 21:5 says, “The plans of the diligent lead surely to advantage, but everyone who is hasty comes surely to poverty.  Author Lewis Carroll said it this way, “If you don’t know where you are going, any road will get you there.”

If you are unsure about creating your own financial savings plan, find someone you trust who has the experience, expertise and background to help you create a plan.  Proverbs 15:22 tells us, “Without consultation, plans are frustrated, but with many counselors they succeed.”

Once your plan is in place, use it and stick to it.  Saving or investing a small amount of money on a consistent, regular basis may not seem exciting, but that is how every solid investment plan begins. 1 Corinthians 16:2 says, “On the first day of every week each of you is to put aside and save, as he may prosper, so that no collections be made when I come.

Now let’s take a look at some action items which you may want to incorporate into your financial plan to reduce debt and increase savings.


  • Cut up all of your credit cards except one
  • Stop using credit cards to make purchases
  • Aggressively pay off the balance on your highest interest rate card (pay more than the minimum)
  • Continue this process until credit card debt has been paid off
  • Pay off all non-mortgage loans such as car loans and student loans
  • Make a commitment to only borrow money for things you need (reliable transportation) and not for things you want (new boat)
  • Add extra principle payment to your monthly mortgage payment
  • Pay off your home


  • Save $1000 for emergencies (even if you start with just $25 per pay check)
  • Increase savings to one month’s living expenses
  • Increase savings to three month’s living expenses
  • Begin saving for your next major purchase (new car)
  • Start a retirement savings plan or increase your payments to it
  • Begin savings for children’s education
  • Start a non-qualified investment account

Whatever your current financial picture looks like, remember that you got to where you are one dollar at a time.  You can get to where you want do go the same way.  The key to a brighter financial future is to have a plan and then use it. As it says in Proverbs 13:16A: “A wise man thinks ahead; a fool doesn’t, and even brags about it!”

Have you developed a debt and savings plan? If so, what strategies have been the most effective for you?

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