Save or Spend?

johnTalk to any money manager and the first thing they’ll tell you is to start saving. Establishing a savings plan is one of the most recommended strategies in the world of money management, yet it is one of the least utilized tools for many Americans. In 2013, the average savings rate in the United States was 4.2%. That means people only saved about 4% of all the income they received. Think about how impossible it will be to pay for college, a new home, or retirement at that rate! And many people fail to take advantage of employer match savings programs, leaving free money on the table.

On the opposing end of the spectrum, there are those who save for the sole purpose of becoming rich. In Luke 12:16-21, we read the parable of the rich fool who stored up for himself “…ALL my grain and other goods.”  His first thought was selfishness – keeping everything for himself. “But God said to him, ‘You fool, this night your life will be demanded of you; and the things you have prepared, to whom will they belong?’” (Luke 12:20) Saving for the simple purpose of getting rich is not a Godly goal. Jesus called the rich man a fool because his savings was not balanced by generosity. The goal of getting rich pulls our hearts into the material world and away from God.

So, how do we strike the delicate balance between too much and too little?

In any long-term plan, whether it involves dieting, getting into an exercise program or saving, the first step is always the most important. Understanding the ideals of Biblical stewardship is the first step to living a stewardship lifestyle. When our hearts are in the right place, our actions and decisions will be much easier to make.

After an attitude adjustment, it’s important to have a long-term attitude about savings. People often wait until some arbitrary time in the future to save, only to find that they’ve missed years of savings opportunities. It’s important to start now, even if it’s just a small amount.

Take the example of two different savers who both earned 10% on their savings.  At age 21, Danielle saves $1,000 per year for eight years.  Matt starts at age 29 and saves $1,000 per year each year till he is 65.  At age 65, Danielle has a total of $427,736 and Matt has a total of $363,043. Because Danielle started earlier and earned interest on her interest for a longer period of time, she accumulated almost $65,000 more than Matt who actually saved $29,000 more. Albert Einstein once said,  “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

By having a Godly attitude, starting early and living lifestyle rooted in Biblical stewardship that encourages you to save, you’ll be well on your way to a healthy savings account. However, no matter how much we’ve saved, we must keep in mind the following verse from 1 Timothy 7:17: “Tell the rich in the present age not to be proud and not to rely on so uncertain a thing as wealth but rather on God, who richly provides us with all things for our enjoyment.”


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