Tag Archives: emergency fund

Needs vs Wants

Posted on by brokenredeemed

This post has been a long time coming. I always start it, but then don’t know where to go from there. If you’ve been following for any length of time, you know that we live a debt-free lifestyle, based on Dave Ramsey’s teachings. And we’re currently on baby step 3–saving our 3-6 month emergency fund–while awaiting the birth of our second-born.

We haven’t done too much this summer since we’ve been really trying to save our emergency fund before baby number 2 arrives, but we did drive to South Carolina to see family for Memorial Day weekend, spent some afternoons by the community pool, and entertained some family in our home. We also taught our second Financial Peace class at our church, which we just wrapped up at the end of July. I’m 9 months pregnant and pretty content to be home with my family, but as I scroll through my social media news feeds, I can certainly understand why someone would feel differently.

This summer I’ve watched friends, family, and even strangers, travel all over; purchase new vehicles and homes; and decorate, plan, & organize all the things. And there’s nothing wrong with these, as long as we save, pay cash/debit for them, and aren’t sacrificing our needs for them. So, lets talk about what our needs are. Dave Ramsey calls them the 4 walls:

  1. Housing (Rent/Mortgage)
  2. Utilities (Water, electric, gas, phone, etc.)
  3. Transportation (taxes, car insurance, gas, oil)
  4. Food (groceries)

The 4 walls are especially helpful when we’re struggling to make ends meet, living paycheck to paycheck, or have a loss of job; we always take care of our household first. These are the items we budget for before we spend money on anything else. There are the occasional exceptions, such as school uniforms and/or supplies, or an outfit for a job interview; but these aren’t going to occur very often.

Now, what are some things that are not considered necessities?

  • Eating out
  • Cable
  • The latest cell phone
  • Coffee from a coffeehouse
  • Vacations
  • New clothes/accessories
  • High-end makeup
  • New vehicles
  • Tickets (movies, theater, sports, concerts)
  • New home decor/furniture
  • Extracurricular activities for the kiddos

We could obviously go on and on. But these are all extras and if we’re in a real financial bind, they can, and should, be cut from the budget. It doesn’t have to be for always; just until we have more breathing room in our budget.

Additional income, an emergency fund, and a plan in place can make a world of difference. If you don’t have a plan in place, you’ll always be flying by the seat of your pants, wondering where all your hard-earned money went, and why you can never get ahead. If you want to know more about our plan, check out my other posts on finances, budgeting, and dumping debt.

Floods, Faith and Finances: A look at Proverbs

Posted on by brokenredeemed

I’ve been following Dave Ramsey for a few years now and when my husband and I got married we were both committed to living a debt-free lifestyle. We were both working outside the home then, so each month we budgeted our income, and were able to very quickly pay off his vehicle, and then began to do the same with my student loan. Then, just 6 months into our marriage we found ourselves expecting, so we pushed pause on our debt-snowball (as Dave calls it, and as he recommends) and just started saving as much as we could, while still making the minimum payments on the loan. Once Cookie girl and I came home safe and sound, and the hospital bills were paid, the rest of money that we’d saved went to paying off the student loan. And then I was free to leave my job and stay home with the baby. I was nervous and excited about leaving my job to be a stay-at-home-mom.

After a few months we decided we were ready to purchase a home. Now, Dave Ramsey recommends that you save up a 3-6 month emergency fund and your 20% down payment before purchasing. Let’s just say, we were impatient, lol. We saved a couple thousand and were ready to move. We did not follow Dave’s recommendation, but we still tried to be wise in our financial decisions. We always kept a small emergency fund, refused to use credit (except the mortgage, obviously), and made sure our monthly mortgage payment wouldn’t exceed 35% of our take-home pay.

After a few months of being in our new home we’re finally back on track as far as budgeting and savings go. We’ve been putting a percentage of each paycheck in our emergency fund to build it up, and allocating money for our tithe, mortgage, utilities, groceries, etc. This means we’ve been taking some time to get our home in order, since we’re purchasing everything with cash, little by little.

The Flood…Well, a few weeks ago I called a plumber about a leak we noticed in our 2nd bathroom; the drywall was stained from moisture. He told us that it looked like the caulking needed to be repaired on the bathtub and the water was pooling in that spot. So, Saturday my husband and I went to the hardware store for items to make the repair. As he began tearing away old drywall, he noticed it was very wet. We decided we would call another plumber for a second opinion, but wanted to spray the area with a little mold and mildew remover since the area was now open. Suddenly, he heard a drip and then a pipe started spraying water everywhere! He raced downstairs to turn off the water and we called our insurance and the plumber.

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The culprit behind the leak, turned sprayer.

By Sunday afternoon, the pipe was repaired, the flooring and drywall removed, and dehumidifiers were in place. But Sunday morning, as I headed to church I was thanking God. For one, W was originally supposed leave on a work trip this weekend, and if that pipe had decided to spray when it was just me at home I wouldn’t have known how to shut the water off, or who to call for help. Second, we were home when it happened and were able to shut the water off before too much damage occurred. And third, we were able to pay for the repair using money set aside for our emergency fund.

Every day I pray over our home, that God protect it, and us; and that God give us wisdom over our household, marriage, child(ren), ministries, and finances; and I thank Him for His many blessings. Interestingly enough, I was thanking God for being our provider and helping us build our emergency fund, just a few days ago, and I noted that our emergency fund is not where we place our faith. Our faith is in God and His provision, because He gives us everything we need. And it’s our responsibility to be a good steward of these things. To plan and manage our finances according to biblical principles is to walk in obedience.

But what does that look like? The book of Proverbs is a great place to start. I want to share more on this book in the future, but here are a few financial principles you can find straight from the Word of God.

Tithe.

Proverbs 3:9 (AMP) says to “honor the Lord with your capital and sufficiency and with the first fruits of all your income.”

God doesn’t need our money, it belongs to Him from the get-go. The Word says the earth is the Lord’s and everything within it (Psalm 24:1)! To give Him the first fruits is to show that we recognize that it’s God who provides, that we are thankful for His provision, and that we honor and respect Him. At least a tenth of our income should be given to establish His kingdom and do His work.

Know the value of money.

Like I stated previously, money shouldn’t be where we place our faith. It can’t save us from the grave, and it certainly can’t save our souls; it’s simply something we use. Proverbs 3:13-16 states that godly Wisdom is much more valuable than riches, and it should be what we strive for more than anything else.

While there’s nothing wrong with wealth, in itself, putting it above God is wrong. Proverbs also states that “wealth is worthless in the day of wrath, but righteousness delivers from death” (11:4, NIV); “those who trust in their riches will fall, but the righteous will thrive like a green leaf” (11:28, NIV); and the rich man is deluded if he believes his wealth will protect him (18:11, my paraphrase based on the AMP, lol).

Work diligently.

While money and/or wealth should never supersede our obedience or love for Christ, we do need an income to provide for ourselves, our family, and in order to give. That’s why Proverbs has so much to say on this point:

  • Lazy hands make for poverty, but diligent hands bring wealth (10:4, NIV).
  • Those who work their land will have abundant food, but those who chase fantasies have no sense (12:11, NIV).
  • Diligent hands will rule, but laziness ends in forced labor (12:24, NIV).
  • The lazy do not roast any game, but the diligent feed on the riches of the hunt (12:27, NIV).
  • All hard work brings a profit, but mere talk leads only to poverty (14:23, NIV).
  • Do you see someone skilled in their work? They will serve before kings; they will not serve before officials of low rank (22:29, NIV).
  • Put your outdoor work in order and get your fields ready; after that, build your house (24:27).

The list goes on! Proverbs 6:6-11,16:26, 19:15, 21:25, 27:23-27, and 28:19 all mention work, and/or laziness, as well.

Don’t be in haste to make a quick buck.

Building wealth, an emergency or retirement fund, or paying off your home doesn’t normally happen overnight. But if it did/does, God has something to say about that, too. Proverbs states that “dishonest money dwindles away, but whoever gathers money little by little makes it grow” (13:11, NIV); “an inheritance claimed too soon will not be blessed at the end” (20:21, NIV); and “a faithful person will be richly blessed, but one eager to get rich will not go unpunished (28:20, NIV).

Be a person of integrity.

I shouldn’t have to say this, but being a person of integrity will go a long way in every area of life, including your finances. Proverbs has much to say regarding this as well:

  • The Lord detests dishonest scales, but accurate weights find favor with him (11:1, NIV).
  • A wicked person earns deceptive wages, but the one who sows righteousness reaps a sure reward (11:18, NIV).
  • Better a little with the fear of the Lord than great wealth with turmoil (15:16, NIV).
  • Better a little with righteousness than much gain with injustice (16:8, NIV).
  • The wicked accept bribes in secret to pervert the course of justice (17:23, NIV).
  • Better is a poor man who walks in his integrity than a [rich] man who is twisted in his speech and is a [shortsighted] fool (19:1, AMP).

Again, the list continues with Proverbs 3:33, 16:20, 20:10, 20:23, 21:6, 22:1, 22:22, 28:6, 28:8, and 29:24.

Be content with what God provides.

Being content with what God provides doesn’t mean you can’t work harder to bring in more income, what it does mean, is that we don’t covet the things others have, or live in longing, and let our want consume us. Proverbs states that “the wicked desire the plunder of evil men, but the root of the righteous yields richer fruit” (12:12, AMP); “the craving of a sluggard will be the death of him, because his hands refuse to work. All day long he craves for more, but the righteous give without sparing” (21:25-26, NIV); “he who has an evil and envious eye hurries to be rich and does not know that poverty will come upon him” (28:22, AMP); and “the greedy stir up conflict, but those who trust in the Lord will prosper” (28:5, NIV).

Be generous.

As Proverbs 21:26 states, “the righteous give without sparing.” The Word says that when we give it will be returned unto us (Luke 6:38). However, this isn’t to say that when we give of our finances, we’ll receive more money in return; but a few things I’ve learned about giving are: 1) We honor God in our finances (and lives) when we give, 2) When we give, the remainder of our income is always enough to meet our needs, and 3) Our hearts are changed, and we become less concerned with our needs, than the needs of others. Proverbs says that “one person gives freely, yet gains even more; another withholds unduly, but comes to poverty” (11:24, NIV); “whoever oppresses the poor shows contempt for their Maker, but whoever is kind to the needy honors God” (14:31, NIV); “whoever is kind to the poor lends to the Lord, and he will reward them for what they have done” (19:17, NIV); and “whoever shuts their ears to the cry of the poor will also cry out and not be answered” (21:13, NIV). Other verses concerning this, are Proverbs 22:9, 22:16, 22:22, and 28:27.

Don’t co-sign on someone else’s debt.

Now, being generous does not mean that we loan out money, or co-sign on another’s loan. Being generous means we simply give, no strings attached, and no expectations of being repaid. Proverbs states, more than once, that we should not co-sign on another’s loan. I love how the amplified Bible puts it:

My son, if you have become surety (guaranteed a debt or obligation) for your neighbor, If you have given your pledge for [the debt of] a stranger or another [outside your family], If you have been snared with the words of your lips, If you have been trapped by the speech of your mouth, Do this now, my son, and release yourself [from the obligation]; Since you have come into the hand of your neighbor, Go humble yourself, and plead with your neighbor [to pay his debt and release you]. Give no [unnecessary] sleep to your eyes, Nor slumber to your eyelids; Tear yourself away like a gazelle from the hand of the hunter And like a bird from the hand of the fowler.~ Proverbs 6:1-5

The author writes like it’s a life or death situation!

Proverbs also states that whoever co-signs a loan will suffer (11:15), that only a fool (or one who lacks sense) co-signs for another (17:18), and that the creditor will be quick to take the belongings of the co-signer when the primary cannot repay the debt (20:16, 22:26-27, 27:13).

Don’t be a borrower.

There’s a saying I once heard: “Neither a lender or borrower be.” I can’t remember where I heard it exactly, but it came to mind while I was writing my notes for this post. Proverbs 22:7 (NIV) states that “the rich rule over the poor, and the borrower is slave to the lender.” A slave…

Being in debt, whether to a bank, credit card company, friend or family member, etc. is like being enslaved. It’s not something we think about in that manner, very often, is it? But every month we must pay someone else our hard-earned money (plus interest!), or risk repossession, foreclosure, calls from debt collectors, being sued, or liens on your bank accounts or estate (after your passing). Without that debt hanging over your head, your income would be yours to do with as you please (or as God deems fit).

Spend wisely.

Lastly, spend wisely. Proverbs says “the plans of the diligent lead to profit as surely as haste leads to poverty” (21:5, NIV); “whoever loves pleasure will become poor; whoever loves wine and olive oil will never be rich” (21:17, NIV); “there is precious treasure and oil in the house of the wise [who prepare for the future], But a short-sighted and foolish man swallows it up and wastes it” (21:20, AMP); and “do not join those who drink too much wine or gorge themselves on meat, for drunkards and gluttons become poor, and drowsiness clothes them in rags” (23:20-21, NIV).

If we waste all our money on things we don’t need, or that deliver temporary satisfaction, we won’t be able to take care of our every day needs. This doesn’t mean that we can’t have fun, it just means that we have to set limits and budget. In the last chapter of Proverbs we read about the virtuous woman (often described as the Proverbs 31 woman); in verse 16 we read about how she considers buying a field–she thinks about it before doing so–and in verse 25 we read that she’s unafraid of the future because she and her family are ready. Are you ready?

I know this was a long post, but the book of Proverbs just has so much to say about our finances and I didn’t want to leave anything out. As I’ve mentioned before, there will be more posts on Proverbs in the future. I’ve been reading it over and over again for the last few weeks, and have been jotting down notes regarding different areas of our lives that it pertains to. I’d recommend reading it if you haven’t already, or re-reading it if you have, and check back with me in the upcoming weeks. Take care and God bless!