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Savings--Feast or Famine?

By Bill G. Page

The average American saves less than 5%. In recent months, the average savings rate for Americans has actually been negative—Americans have spent more than they earned. People in other industrialized nations such as Canada, France, and Japan save 11% to 15%. Just as your individual standard of living will decline in retirement without adequate savings, future generations of Americans will see their standard of living decline if the U.S. economy loses ground against global competition. It requires the efforts of individuals, families, corporations, and government to increase America’s savings rate.

In Aesop’s fable about the grasshopper and the ant, the grasshopper ignored the potential for future difficult times and starved. The ant saved some food for the winter and was able to survive because of his foresight.

Saving money means accumulating funds for emergencies, seasonal expenses, short-term goals, and long-term goals. Like Aesop’s grasshopper, you can use up all your resources now and have nothing later, or you can save for the future by spending a little less today, investing the savings and then being able to spend a whole lot more in the future. Most Americans can do with less. According to Dr. Gregory A. Boyd in his book Letters from a Skeptic, Americans “make up about 7 percent of the population of the earth, but we consume over half its resources!”

After tithing/giving, your first order of business with your finances should be building your cash reserves for a bare minimum of three months living expenses for emergencies such as a job loss, unexpected medical expenses, repairs and automobile maintenance. Six to nine months living expenses as an emergency fund is even better. Keep your emergency fund in an easily accessible liquid account. In fact, money you will need within five years should be kept in safe investments such as bank CDs, money-market funds, treasury bills, or mutual funds that purchase top-rated bonds maturing in one to three years. Money that you will not need within five years can be invested in the stock market. Saving and investing gives you comfort and a sense of security. Being in financial distress can create mental anxiety. Even if you never have to use your emergency fund for a “rainy day,” it will provide funding for a “sunny retirement.” Saving helps you to feel more secure about tomorrow, which makes you feel happier about today.

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Saving should be considered a spending priority. The number one rule of saving for retirement is to begin saving immediately. The sooner you start saving, the longer your money will work for you through the magic of compound interest. Every pay period, pay yourself by saving. Regardless of the amounts, savings should become part of your normal routine economic habit. Saving consistency and discipline are keys to achieving good results. Automatic savings plans are a great way to insure your financial future. Automatic payroll deductions from work into your company’s savings and investment plan or automatic payroll deductions sent to a credit union or other savings vehicle removes the temptation to spend the money on things other than savings. Avoiding having the money sent to you in the first place is the easiest way to save.

“The wise man saves for the future, but the foolish man spends whatever he gets”—Proverbs 21:20 (The Living Bible).

This article is adapted from Making Money Work: A Christian Guide For Personal Finance (Author: Bill G. Page) with permission of Willie Glenn Page, Inc. Copyright 2005.

© Bill G. Page
Bill G. Page is the author of "Making Money Work: A Christian Guide for Personal Finance". It is a book and CD ROM (ISBN 0-9764905-0-1) that combines the power of Biblical principles with modern day technology to empower people to become better stewards of God's resources. The CD ROM helps you to easily calculate complicated personal financial formulas. It also helps you analyze, plan, track and achieve your financial goals. The book may be obtained through your local bookstore or it can be ordered online at


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