How Much Should You Save?
We’ve established that saving money is really important. So how much should you save? Again, there is no solid “right” answer. The easy (for us to say) philosophical answer is “as much as you can.” If you’ve given the money away that the Lord has lead you to, then to best steward your money, you ought to save as much as you can. The more that you actually save and invest, the more quickly you’ll be able to produce a dynamic difference in the world with that wealth. For most people, there is no greater determining factor on the amount of wealth built than the amount saved!
However, most people come to us very conditioned by the world to consume the vast majority of what they bring in. So we will talk in terms of minimums. Again, if you want to really steward your wealth well, you need to save more. A minimum amount that you need to be saving is 15%. We’ll give you some of the reasons for this below.
If you’re saving little to nothing right now, you will have to make a decision. Are you willing to make the hard sacrifices necessary (by drastically changing your lifestyle) to get to 15% savings? Or not. If not, you will have to do your best to work towards this. Don’t let the enemy lure you into the trap of believing all is hopeless. If you’re only able to save 5% now, start there, and over time you will find more ways to cut back in your spending habits, and also be able to save new earnings (such as raises through work, or increases in business) which will slowly bring you to 15% and beyond. This can all happen much quicker than you think if you will simply take small steps towards this goal. If you’re willing to make the hard choices and stick to them, you will accomplish more even quicker!
So why do you need to save 15%? Well, it’s impossible to know what you will need in the future. Most financial planners will calculate some amount that you need in the future by having you guess at what sort of future lifestyle you would like, and then having you guess at what rate of return you’ll achieve for the rest of your life, and then having you guess at what level of inflation will happen in the future. That’s a lot of guessing isn’t it?
Yet, it all seems very official when bound in a nice leather book. You could run over to any number of financial websites and do the same calculation in about 2 minutes, and it won’t be any less accurate than the fancy answer. The real answer is that no one knows what you will need in the future. We have no idea what these factors will be in the future. So all you can do is do as much as you can. But we do know that if you don’t save at least 15% over the long term, you’ll have no chance of financial freedom.
We’ve mentioned inflation a lot recently, and that will certainly take its toll on your assets, making everything you save worth less than when you saved it. Which means you need to save all the more!
A similar (but different) effect is technological advancement and obsolescence. Do you own a cell phone? What about a computer? Did you own these things 15 years ago? No? Then if you were simply “counting” on the effects of inflation, how could you have planned to be ready for these new things that would become necessities. Depending on your age, you might have once owned a black and white TV. Are you still watching it? Chances are, over the years, you felt the need to buy a nicer TV. None of these things are “necessities”, but then, nothing really is. (Philippians 4:11-13) You could move to the middle of Wyoming and live in the woods and hunt your own food, and really not need much of anything. But in real life, there are “Wants” and we tend to want things – new conveniences- because once a convenience is enjoyed, it begins to feel much more like a necessity. It’s important to not let this overrun and control your decision making because you will always be a slave to new technology and money. (Romans 6:16-18) But some enjoyment of these new things is fine, but they must be paid for. So 15% is the minimum amount of your earnings that you should send into your Wealth Gate each year.
“He who heeds discipline shows the way to life, but whoever ignores correction leads others astray.” (Proverbs 10:17)
These realities of this broken world should never be discouraging. As you seek after His Kingdom, the Lord will take care of your every real need. Doesn’t He take care of the lilies? (Matthew 6:28-34) However, our purpose here is to help you steward your life in a way that you are not only living God’s purpose for your life, but that you have managed well the financial resources that He gives you so that they may be tools for the Kingdom. As always, the warning must be heeded that as money is saved, you must not grow heart strings to it. This love of money is a root of evil. (1 Timothy 6:6-10) Instead, when this system is followed with a heart for and purpose of honoring the Lord, you will understand and be filled with joy that these rusting/perishing riches that pass through your hands may be used to buy eternal riches.
We’ll get into how as we get further into this course. So share this post with someone that they may join us.
Photo credit: nikkinoguer